Citicorp Profits Tumble 37% in Quarter

Citicorp said today its second-quarter profits tumbled 37%, reflecting problems the nation’s largest banking company is having with real estate loans and the failure of Argentina and Brazil to pay loan interest.

The parent of the nation’s biggest bank, Citibank, said it earned $248 million, or 64 cents a share, for the three months ended June 30 compared with $395 million, or $1.11 a share, a year earlier.

The company said its earnings were up 28% from consumer banking activities and 44% from international banking and finance activities.

But it said weakness in the real estate market, especially in the United States, hurt its results.

Citicorp said its credit loss provision was $473 million for the quarter, up $144 million from a year earlier. Its commercial loan loss reserve was boosted by $58 million, bringing its reserve to $744 million.

“The continuing uncertain real estate environment may cause write-offs to continue at relatively high levels until we see some stabilization in values,” the company said in a statement.

In addition, the company reported an $82-million loss for the quarter on cross-border loans due to non-payment of loan interest by Argentina and Brazil. Citicorp reported a profit of $25 million from cross-border lending in the second quarter last year.

For the first six months, Citicorp earned $479 million, or $1.24 a share, down 48% from $924 million, or $2.63 a share, a year earlier.