Citi’s net profit from consumer lending
in North America soared to $1.23bn in the six months to end-June,
up from $67m a year ago.
The rise in net income was boosted by an
improvement in net credit losses and loan loss provisions:
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Net credit losses fell by over a third (36%)
in the first half of the year compared with the year-ago period to
$2.74bn.
Citi slashed provisions for loan losses and
for benefits and claims by 70% year-on-year to 1.35bn.
The bank’s cards division continued to go from
strength to strength since returning to profit at the end of last
year:
Net income from the Citi-branded cards
division amounted to $1.04bn, compared with a net loss of $304m in
the six months to June 2010.
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By GlobalDataBranch numbers remained the same at 1,002
units.
Retail banking accounts declined by 3% to
$12.9bn, while loans on the other hand increased by 9% $33.6bn.
Retail cards may be moved out of Holdings
A rapid improvement in Citi’s retail partner
cards divisions, part of its Citiholdings portfolio, prompted CEO
Vikram Pandit to say that the bank was re-evaluating the businesses
in Citiholdings periodically.
“As we’ve said before, putting the retail
partner cards business in Holdings was not because we ever thought
it was a bad business, it just didn’t seem to fit the Citicorp
strategy when we laid that out.
“Now we have been running the partner cards
business as an operating entity. We’ve done a lot of work to
restructure the business.
“But the ultimate question that we’d have to
answer as far as whether or not it goes back is, ‘Does it fit the
Citicorp strategy?’ And that’s just not a determination that we’ve
made as of yet,” Pandit said during the earnings announcement.
He added:
“You may recall at the beginning of last year,
we actually moved some loans and other things out of Holdings back
into Citicorp exactly because of that type of review. We look at it
all the time. And if and when we conclude any of that analysis,
we’ll certainly let you know.”
Retail partner cards generated a pre-tax
profit of $769m in the second quarter, up from $155m a year
ago.
