Why was Citigroup losses masked by Smith Barney gains?
NEW YORK (Reuters) – Citigroup Inc (C.N), one of the big U.S. banks hit hardest by the financial crisis, posted a quarterly profit on Friday as gains from the sale of its Smith Barney brokerage into a joint venture more than offset losses from its primary banking businesses. Excluding the gains, the bank reported a second-quarter loss that was narrower than expected. “It’s a mixed quarter. You weren’t looking for a Goldman Sachs or JPMorgan-type of quarter, but we expected Citi to be a lot better than it was” in recent periods, said Michael Mullaney, who helps manage $9 billion for Fiduciary Trust Co in Boston. Like Goldman and JPMorgan, which delivered surprisingly strong earnings earlier this week, Citigroup reported some robust trading and investment banking results. Yet credit losses continue to be a drag. “They seem to be suffering more than other (banks) as far as losses go from credit cards, mortgages and consumer loans in general,” Mullaney said. Citigroup, propped up with a $4
