Citigroup Inc reported a 46per cent plunge in quarterly profit on Wednesday as the bank set aside nearly US$5 billion to prepare for an expected ...
REUTERS: Citigroup Inc reported a 46per cent plunge in quarterly profit on Wednesday as the bank set aside nearly US$5 billion to prepare for an expected flood of defaults on loans due to a virtual halt in economic activity caused by the coronavirus pandemic.
Lenders with more exposure to unsecured loans such as credit cards are more susceptible to hefty writedowns, as credit card delinquencies have historically risen in lockstep with unemployment. JPMorgan Chase & Co said on Tuesday its profit plunged by more than two-thirds mostly because of a US$7 billion addition to loan loss reserves, half of which were for credit cards."Our earnings for the first quarter were significantly impacted by the COVID-19 pandemic," Citi's Chief executive Officer Michael Corbat said in the earnings statement.
The blow to earnings was cushioned by a surge in fees as trading desks cashed in on the turbulent markets in February and March. Both equities and fixed income trading reported a 39per cent jump from a year earlier.
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