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Citigroup 4Q profit rises
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January 17, 2002: 1:33 p.m. ET
No. 1 financial services company's profit up despite Enron, Argentina exposure.
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NEW YORK (CNN/Money) - Citigroup reported higher fourth-quarter profit Thursday, despite nearly $700 million of losses relating to its exposure to Enron and Argentina.
The nation's biggest financial services company was not as badly hurt by faltering loans as another New York financial house, J.P. Morgan Chase & Co., which Wednesday reported a fourth-quarter loss due to write-offs of Argentine and Enron debt. Argentina has said it will default on its foreign debt to try to stabilize its domestic economy.
Citigroup (C: up $1.11 to $49.97, Research, Estimates) said it earned $3.9 billion, or 74 cents a share, in the quarter, up from $3.3 billion, or 65 cents a share, a year earlier. Analysts on average anticipated a profit of 73 cents a share, according to earnings tracker First Call.
Revenue rose 12 percent to $22 billion.
Citigroup's results include a $228 million loss relating to bankrupt energy trader Enron, and $470 million due to the economic problems in Argentina. Chairman Sanford Weill said that Citigroup performed "extraordinarily well" in the quarter, given the recession, Enron's bankruptcy and the turmoil in Argentina.
"It was a difficult year for all of us, as the world has had to deal with the events of Sept. 11, the global slowdown and unusually turbulent markets," he said in a statement.
The New York-based company, which owns Citibank, Travelers Insurance and brokerage Salomon Smith Barney, had $1.8 billion in reduced revenue, higher losses and increased provisions as a result of Sept. 11, Enron and Argentina, he added.
The 11 interest rate cuts by the Federal Reserve last year spurred consumers to use credit cards and take out mortgages, which helped Citigroup's consumer business, offsetting some of the problems it faced in other areas.
Citigroup, with operations in more than 100 countries, also benefited from its global reach except in Argentina, where it took losses on bonds and loans amid the country's planned currency devaluation.
Earlier this week, FleetBoston Financial Corp. took the unusual step of postponing its fourth-quarter earnings report until it can sort out its full exposure to Argentina.
Separately, Bank of New York Co. (BK: up $0.10 to $43.33, Research, Estimates) reported lower profits of 45 cents a share in the fourth quarter, down from 50 cents a share a year earlier. The results were a penny shy of average forecasts of 46 cents a share, according to analysts polled by First Call.
The New York-based bank and trust company cited a previously announced charge tied to bad loans and corporate bankruptcies in the weak U.S. economy. 
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