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Citigroup profit soars in third quarter

NEW YORK, Oct 17 – US banking giant Citigroup on Monday reported a better-than-expected surge in third-quarter profit as the cost of credit dropped.

Net income leaped to $3.8 billion in the July-September period, a 74 percent increase from the same period last year, and a 13 percent rise from the second quarter, the bank said in a statement.

Citi reported earnings per share excluding special items of 84 cents, better than market expectations of 82 cents.

Third-quarter revenues of $20.8 billion increased “slightly” from the prior year period and the second quarter 2011, it said.

Total cost of credit during the quarter fell 43 percent to $3.4 billion, driven by a 41 percent decline in net credit losses to $4.5 billion and a $1.4 billion release of credit reserves, “reflecting a lower level of inherent losses remaining in the portfolio.”

“Citi continues to navigate a challenging economic environment and delivered another quarter of solid operating results,” Vikram Pandit, Citi’s chief executive, said in the statement.

“We continued to manage our risk prudently while growing the businesses that are core to our strategy.”

Citi, which was among the world’s biggest banks before suffering heavy losses in the 2008 financial crisis, required a government bailout of $45 billion to stay afloat.

The US government sold its last holding in Citigroup earlier this year.

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