Citigroup Juices its Profit With an Accounting Trick

Citigroup (NYSE:C) booked a profit of $1.23 per share compared with a year earlier figure of $0.72 per share.  Analysts had expected earnings o f$0.82 per share.  A large part of Citigroup’s reported profit came in the form of an accounting adjustment, dubbed a “credit-valuation adjustment,” rather than organic income generated from the bank’s operations.  Excluding the accounting adjustment, Citigroup’s operations generated earnings per share of $0.84.

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Following is some information about Citigroup’s stock price performance, along with that of some of its competitors.

  • Citigroup (NYSE:C): The shares recently traded at $28.40 and have traded in a 52-week range of $21.40 to $51.50.  The company’s market capitalization is $82.78 billion.  About the company: Citigroup, Inc. is a diversified financial services holding company that provides a broad range of financial services to consumer and corporate customers around the world.  The Company’s services include investment banking, retail brokerage, corporate banking, and cash management products and services.
  • Bank of America (NYSE:BAC): The shares recently traded at $6.19 and have traded in a 52-week range of $5.13 to $15.31.  The company’s market capitalization is $62.73 billion.  About the company: Bank of America Corporation accepts deposits and offers banking, investing, asset management, and other financial and risk-management products and services.  The Company has a mortgage lending subsidiary, and an investment banking and securities brokerage subsidiary.
  • JPMorgan Chase & Co. (NYSE:JPM): The shares recently traded at $31.89 and have traded in a 52-week range of $27.85 to $48.36.  The company’s market capitalization is $124.34 billion. About the company: JPMorgan Chase & Co. provides global financial services and retail banking.  The Company provides services such as investment banking, treasury and securities services, asset management, private banking, card member services, commercial banking, and home finance.  JPMorgan Chase serves business enterprises, institutions, and individuals.
  • Wells Fargo & Company (NYSE:WFC):  The shares recently traded at $26.67 and have traded in a 52-week range of $22.58 to $34.25.  The company’s market capitalization is $140.81 billion.   About the company: Wells Fargo & Company is a diversified financial services company providing banking, insurance, investments, mortgage, leasing, credit cards, and consumer finance.  The Company operates through physical stores, the Internet and other distribution channels across North American and elsewhere internationally.
  • Morgan Stanley (NYSE:MS): The shares recently traded at $15.22, and have traded in a 52-week range of $11.58 to $31.04.  The company’s market capitalization is $29.34 billion.  About the company: Morgan Stanley, a bank holding company, provides diversified financial services on a worldwide basis.  The Company operates a global securities business which serves individual and institutional investors and investment banking clients.  Morgan Stanley also operates a global asset management business.

(Note: Selected financial data are sourced from Google Finance.  All data are assumed to be accurate.)

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