Citigroup, according to a piece I just heard on MSNBC, has had two profitable months in the first quarter of 09, yet the government has had to buy close to 40% of its stock. So, is the bank failing? Citi says it is profitable, It even says it is making loans.
I’m confused.
Here’s what Vikram Pandit, Citi’s CEO, said this morning in a memo:
I am most encouraged with the strength of our business so far in 2009. In fact, we are profitable through the first two months of 2009 and are having our best quarter-to-date performance since the third quarter of 2007. In January and February alone, our revenues excluding externally disclosed marks were $19 billion. Our client businesses are strong: our deposits are relatively stable, our client-driven Securities and Banking businesses have been performing well, including our recent #1 rank in M&A, and we continue to provide credit to consumer and corporate customers. You have all done a very impressive job driving revenues and reducing our cost structure, and it is gratifying to see the results first hand.
Citi has gone from about $1 to $1.25 a share and seems to be holding its own. Warren Buffet thinks it will be going up.
So… is this a sign that Obama’s approach is working? Let’s hope so.