Citigroup, one of the largest banking, lending and credit card lending companies here in the US, gave investors and financial analysts a positive surprise last week when their earnings beat estimates forecasted. Before you get too excited though, they beat earning estimates that still did not meet their past performance, but right now in the climate we’re in regarding financials that have anything to do with banking, credit or loans, this is good news evne when the forecasts are not all that ambitious.
In fact, they forecasted to LOSE more than the actual loss they posted, so I’d say that’s an underestimate of an underestimate if there is one. This is just a sign of the times, when a company is actually relieved to post a lower loss (to the tune of billions yet), than they expected. Analysts were actually expecting Citigroup to post a larger loss, about a billion more than was actually lost, so this may actually bode well for their stock, which is in the toilet along with every other major financial institution’s stock.
Citigroup has been exposed to the so called subprime mortgage group extensively, which was one of the reasons for the dismal forecast, but it also has had writedowns in the way of credit card lending losses, and it did sell one of it’s subsidiaries, which actually helped them to conserve on money and post less of a loss for this year so far.
I actually have Citi as one of my mortgage lenders, so it’s good to hear they are in better shape than some other banks who are opening their doors to the FDIC and things of that nature, or being investigated for some sort of fraud. Federal agencies are now cracking down on lending practices across the board to help prevent another economic meltdown like the present one we see in our banks and financial sectors, and it’s not a moment too soon really since this all could have been avoided if banks were more closely monitored for their lending practices and didn’t extend credit to those they know would not be able to make good on the amount of debt they were getting themselves into.