Retail banking keeps Citibank above water in Australia
The Age
Friday April 1, 2011
A SLUGGISH year for investment banking curbed profit growth for the Australian-based operations of US banking giant Citigroup, although local executives are tipping a rebound this year.With conditions rebounding in investment markets here, Stephen Roberts, Citigroup's top executive in Australia declared Citigroup was again poised to compete following its global restructure."We have become fit. Our business was rationalised as a result of financial disruption but we were compelled to become more efficient and more responsible," Mr Roberts said.Citigroup in Australia posted a profit of $165 million for 2010, down from $198.5 million a year earlier. Its stockbroking and investment banking business made a loss of $96 million for the year, from a $16.9 million profit a year earlier.The loss came as volatile markets kept revenue in equities, fixed income and investment banking under pressure and as a major investment spend across the business pushed up expenses.The retail banking arm, which reported a net profit of $261 million for 2010, was up sharply from $181.6 million a year earlier. Earnings were boosted by an improvement in margins, with more loans being funded by deposits, while losses on bad loans fell away. The retail bank lending book shrank slightly to $13.5 billion from $14 billion a year earlier.
© 2011 The Age
