Boston, MA 10/16/2013 (wallstreetpr) – The bank had recently announced an EPS of $1.00 which is rather not bad. Investors had already factored a fall in the capital markets which were expected to take a hit on the earnings of the bank. However, the bank was able to offset the same by improving on the efficient management of its core expenses thereby lowering its credit costs. The bank had been working on a negative operating leverage. This is a general strategy taken by a bank when its earnings are on the decline and there is not much scope for such reversal as the market itself is weak. The bank would have witnessed a fall in its operating expenses had its restructuring expenses been kept apart.
The financials of the bank are However sound and their quality meets the expectation of the market when compared to those of other large capital bank. The bank, out of an EPS of $1.00, had successfully achieved a $0.06 per share tax benefit during the quarter.
What has really hit the company is the fall in fixed income from the capital market which has witnessed a 17% decline when compared to the previous quarter and a whopping 26% lower than the same quarter of the previous year.
The bank had witnessed a decline in Citi Holdings breakeven results for the quarter, witnessing a decline of 12% on first quarter basis. The bank has also stepped up its loan loss provision in Latin America as well as Europe, the Middle East and Africa. This is important as these have been strategic markets for the company in the past. Increases in the loan loss provision reflect what the bank is left with as an allowance for bad loans in the areas. However, the bank has reported a weak consumer, securities and banking results on both these areas.
