Citigroup Profit Falls on Higher Loan-Loss Reserves, Weak Dealmaking Activity
Citigroup Inc. reported a 25 percent drop in third-quarter profit on Friday as the most global of U.S. banks set aside funds to cover soured loans from a potential economic downturn, while its investment bank struggled with a slump in global dealmaking.
The U.S. Federal Reserve’s aggressive actions to stamp out decades-high inflation have triggered fears of a downturn in the economy that could trigger a surge in loan losses for the banks.
Citi added $370 million to its loan-loss reserves in the latest quarter, compared with a reserve release of $1.16 billion a year earlier.
The increase in reserves pushed up Citi’s overall credit costs to $1.36 billion, the highest in eight quarters since the third quarter of 2020….