Citigroup profits take a tumble

Citigroup's profits were hurt by exposure to sub-prime lending

Profits at Citigroup, the largest US bank, fell 57% in the third quarter, hurt by losses in the sub-prime mortgage market.

Net income fell to $2.38bn in the three months to the end of September, from $5.51bn a year earlier, the bank said.

The firm is the latest victim of the credit crunch.

Separately, Japanese bank Nomura has said it is closing its mortgage-backed securities business in the US as a result of the sub-prime woes.

Nomura said the closure would cost it about 73 billion yen ($621m; £304m), meaning it now expected to make a loss in the three months to the end of September.

Bank of America, Deutsche Bank and Merrill Lynch have also reported or projected losses from exposure to the sub-prime mortgage market.

'Disappointing quarter'

Citigroup's chief executive Charles Prince said the results were "well below" expectations.

Citigroup said weaknesses in its consumer business and losses on leveraged loans and fixed-income trading also hurt earnings.

On 1 October, the firm had projected a 60% drop in quarterly earnings.

"This was a disappointing quarter, even in the context of the dislocations in the sub-prime mortgage and credit markets," said Mr Prince.

"A significant amount of our income decline was in our fixed-income business, where we have a long track record of strong earnings, and this quarter's performance was well below our expectations."