Profit setback for Citigroup bank

Citigroup is on the acquisition trail again

US banking giant Citigroup has reported a 26% drop in quarterly net profits to $5.13bn (£2.6bn).

Citigroup said a one-off tax gain last year and costs at its Japanese arm led to lower comparative earnings in the three months to the end of December.

The fourth-quarter figures brought Citigroup's annual profits for 2006 to $23.8bn, down 12% on the previous year.

However the firm pointed to robust quarterly revenues which pushed total revenues for 2006 to a record £89.6bn.

'Targeted acquisitions'

Chief executive Charles Prince said the company had seen "positive trends" in its core US market, which partly off-set regulatory changes in Japan where Citigroup reduced its operations.

Mr Prince added that Citigroup planned to "continue to expand our business through a balance of organic investment and targeted acquisitions".

US federal regulators lifted a one-year ban in April last year on Citigroup pursuing large scale takeovers, which was put in place after the firm was told to improve its business practices.

Since then Citigroup has led a consortium which acquired an 85% holding in China's Guangdong Development Bank, and bought Grupo Financiero Uno and Grupo Cuscatlan in Central America.

In early trading on the New York Stock Exchange, shares in Citigroup were down 18 cents, 0.33%, at $54.21.