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Last Updated: Thursday, 15 July, 2004, 14:14 GMT 15:14 UK
Legal costs hurt Citigroup bank
Citibank branch
The retailing arm of Citigroup has seen growth of 50% in the past year
Citigroup, the world's biggest bank, has reported a 73% plunge in second quarter net profits after it had to pay a particularly expensive legal bill.

Back in May it paid $2.65bn, (1.43bn) to settle claims by Worldcom investors that it had hidden risks connected to the collapsed telecoms firm.

Citigroup has also increased reserves to pay for pending lawsuits concerning the failed energy group Enron.

The bank said however said that overall its business remained strong.

Citigroup's total revenue rose 15% to $22.3bn, exceeding analyst forecasts of $21.4bn.

Net income totalled $1.14bn compared to $4.3bn a year earlier.

"The credit environment is the best we have seen in years," said Charles Prince.

Payout

The $2.65bn Worldcom payment was shared among investors who bought the telecoms firm's shares and bonds between April 1999 and June 2002.

The collapse of Worldcom, hot on the heels of the Enron scandal, shook investor confidence in the finances of corporate America, and triggered a stock market slump.

Worldcom, the failed filed for emergency protection from its creditors over two years ago and embarked on a lengthy restructuring exercise.




SEE ALSO:
Citigroup settles Worldcom claims
10 May 04  |  Business
Citigroup reports record profits
15 Apr 04  |  Business
Citigroup buys South Korean bank
23 Feb 04  |  Business
Citigroup shrugs off Parmalat hit
20 Jan 04  |  Business


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