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Citi Posts $2.2B Profit, Emphasizes Integrity of Foreclosure Procedures

""Citigroup Inc."":http://www.citigroup.com reported Monday that it pulled in a profit of $2.2 billion, or 7 cents per share, during the third quarter of this year. The company outperformed analysts' expectations of 6 cents per share as it boasted its third straight quarter of positive gains.

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Citi's net income results for the July to September time period were down 20 percent from the previous quarter but a significant improvement compared to the New York-based institution's $3.2 billion loss just one year earlier. Citi's net earnings through the first nine months of 2010 come to $9.3 billion.

Though Citi has been able to skirt recent revelations of flaws in several major banks' handling of foreclosure paperwork, the issue was front-of-mind during the company's call with investors on Monday.

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Citi has maintained for weeks now that its servicing and foreclosure procedures are in compliance with federal and state laws and that all affidavits have been processed correctly. The company's CFO John Gerspach reiterated the bank's certainty in opening remarks on the call.

""We continuously review our document handling procedures, and we believe the integrity of Citi's foreclosure process is sound,"" Gerspach said. ""While we use external attorneys to prepare documents, each package is reviewed by a Citi employee who verifies the information and signs the foreclosure affidavit in the presence of a notary.""

Gerspach added, ""When errors are found, the documents are returned to the attorney, who revises the package and resubmits the documents for review. We have intensified our ongoing process reviews and on that basis have not identified any systemic issues.""

According to Citi’s ""Q3 earnings release"":http://www.citigroup.com/citi/press/2010/101018a.htm, the bank reduced the amount of money set aside to cover expected loan losses by $746 million â€" an indication that Citi is seeing improvement in consumer credit quality and loan performance. The company’s credit loss reserve is now at $5.9 billion â€" its lowest level since the second quarter of 2007.

Although Citi has been studiously selling off assets to repay the $45 billion in took in bailout money, the bank is still currently 12 percent owned by the federal government. Treasury officials have indicated they intend to sell off their entire stake in the company by the end of the year.

About Author: Gerry Smith

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