Citigroup (NYSE:C) is trading above the $4 mark once again, after recently beating earnings estimates reporting income of 2.2 billion or .07 cents a share, which is interesting given Citigroup was recently mentioned, along with Bank of America (NYSE:BAC) and others, as being among a group of financial institutions that are plagued by mortgage risk. Citigroup could face heavy legal challenges related to their handling of underwriting mortgages and foreclosing on homeowners. The company did report improvements in retail banking business in both North and South America. Citicorp revenues were also up in Latin America and Asia.
The company was also contacting Citibank credit card customers and offering them an option headed into the end of August in order to clean up their financials some. Unfortunately for the consumer the choice was not much of a choice at all. Many consumers who had no outstanding issues with their Citi credit cards or their payment history were given the choice of either freezing their accounts to keep them open, for 6 months and making payments over and above the minimum, or were given the option of closing their account if they did not agree by Aug 30th. This led to the ability to report that net credit losses declined for the fifth consecutive quarter reflecting continued improvement across consumer portfolios (of course, it was an improvement, many consumers were prohibited from even using their credit cards and were forced to pay down their balances or at the minimum not add to their debt or the company’s exposure to it). This is an example of the abusive systemic issues that have yet to be fully addressed in the Banking industry.
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