Following on the heels of the billion dollar profits of Goldman Sachs and JP Morgan, Citi and Bank of America also reported billion dollar gains. But the Citi and B of A earnings are of an entirely different type. They are decidedly one time in nature and won't be replicate in future quarters in the current manner.
Citi, which is about to cede a 34 per cent stake to the US government, posted a $4.3bn profit compared with a loss of $2.5bn a year ago. Earnings were boosted by a $6.7bn gain from the partial sale of Smith Barney, Citi’s brokerage arm, to Morgan Stanley. Without the gain, Citi would have been deep in the red and seen its sixth loss making period in the past seven quarters. Citi’s shares were down 0.33 per cent at $3.02 at close of trading in New York.
B of A recorded a $5.3bn gain from its sale of a stake in China Construction Bank during the quarter, and another $3.8bn gain on the sale of its share of a merchants payment company to a joint venture backed by an unnamed investor. Excluding those gains, BofA would have posted a loss for the quarter. In market trading after the earnings announcement, investors seemed concerned about BofA’s inability to predict when the business would return to “normal”, sending the bank’s shares down 2.13 per cent by the market’s close in New York.
As even NYT has reported, it's a Goldman Sachs, JP Morgan world.
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