China considers same tax rate for domestic, overseas firms (AFP)
AFP - Chinese lawmakers have mulled a draft law that would impose a 25 percent income tax on both domestic and foreign firms, eliminating the preferential rate for overseas companies, according to state media.
Citigroup posts loss amid credit costs (Reuters)
2008.10.16By Jonathan Stempel and Dan Wilchins 9 minutes ago
NEW YORK (Reuters) - Citigroup Inc, battered by the global credit crisis, posted its fourth straight quarterly loss on Thursday, hurt by more than $13 billion of credit costs and write-downs tied to complex and low-quality debt.
The bank said it was making good progress on shedding assets and cutting costs. But tight credit conditions and potential recessions globally could cut into its other businesses, from retail brokerage to credit card lending.
"There will be two types of banks: those that survive and grab market share, and those that struggle," said Matt McCormick, a portfolio manager at Bahl & Gaynor Investment Counsel in Cincinnati. "Citigroup is trying to position itself as being in the strong camp. But that doesn't make their job any easier. They have significant economic headwinds, and they have continued exposure to illiquid securities."
Citigroup posted a third-quarter net loss of $2.82 billion, or 60 cents per share, compared with a profit of $2.21 billion, or 44 cents, a year earlier. It loss from continuing operations was $3.42 billion, or 71 cents per share.
Revenue fell 23 percent to $16.68 billion. Expenses totaled $14.43 billion, up 2 percent from a year earlier but down 8 percent from the second quarter.
Analysts on average expected a loss of 70 cents per share on revenue of $19.42 billion, according to Reuters Estimates.
Citigroup ceded its crown as the largest U.S. bank by assets to JPMorgan Chase & Co after shedding $50 billion of assets since June. Citigroup ended September with $2.05 trillion of assets, while JPMorgan had $2.25 trillion.
Shares of Citigroup rose 37 cents to $16.60 in pre-market trading.
Chief Executive Vikram Pandit said that while the third-quarter results "reflect both a difficult environment as well as continued write-downs on our legacy assets, we are making excellent progress on the parts of our business we control, including expense reduction, head count, and balance sheet and capital management."
The bank said it has eliminated 11,000 jobs since June, when it employed 363,000 people, and 23,000 jobs this year.
CREDIT COSTS INCREASE
The quarterly results reflected an 86 percent increase in credit costs to $9.1 billion, mainly consisting of $4.92 billion of net credit losses and a $3.9 billion increase in loan loss reserves.
They also included $4.42 billion of net write-downs tied to mortgage debt, leveraged loans, monoline insurers, structured investment vehicles, commercial real estate and auction-rate securities.
Citigroup announced results barely a week after losing out to Wells Fargo & Co in an effort to buy much of the troubled banking giant Wachovia Corp.
Pandit led a bid to pay $2.16 billion for much of Wachovia and quadruple Citigroup's undersized U.S. branch network. But Wachovia later accepted Wells Fargo's $15 billion offer for the entire company. Citigroup is seeking $60 billion of damages for breach of contract and interference with its rights.
The bank's Tier-1 capital ratio, a measure of its ability to cover losses, rose to 8.2 percent as of September 30 from 7.12 percent at the end of 2007. Regulators consider 6 percent sufficient.
Citigroup received a $25 billion capital injection under the Treasury Department program to inject $250 billion into the banking system to help restore confidence and ease the credit crunch.
Shares of Citigroup closed Wednesday at $16.23 on the New York Stock Exchange. They have fallen 45 percent this year, compared with a 35 percent drop in the KBW Bank Index.
(Reporting by Jonathan Stempel and Dan Wilchins; Editing by Steve Orlofsky and John Wallace)
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