Citigroup Q&A With Business Week

From Business week.com...Citigroup Inc. reported a first-quarter profit Monday that far exceeded most expectations.

Citigroup was able to offset ongoing loan losses with strong trading revenue, similar to some of other big banks that reported results last week. The New York-based bank, among the hardest hit by the credit crisis, earned $4.4 billion, or 15 cents per share. Analysts had been expecting a slight loss.

The bank said loan losses are starting to moderate. However, Citigroup executives remain cautious about saying the economy is fully recovered. On a conference call with analysts, Citigroup's chief financial officer John Gerspach discussed what might trigger the bank releasing loss reserves already on hand to cover bad loans instead of completely covering those costs with new revenue each quarter.

QUESTION: Just wondering at what point and what will drive your consumption of reserves. What will be the drivers of yours -- we started to see some (consumption) from some other big banks? What will drive that for you guys as we look ahead?

ANSWER: "I think you got a pretty good answer in our results. We have been releasing some reserves for several quarters now.

"For the last three quarters, we've actually had small loan-loss reserve releases on our corporate loan book, where we've seen good underlying credit trends and got a sense that the book was in good shape.

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