My finance view

Citigroup Inc posted a quarterly per-share loss as credit losses shrank to a still-hefty $8 billion and its commercial and investment banking revenue weakened.

The loss per share was narrower than analysts expected but still underlined how far the bank — which is one-third owned by the U.S. government after three bailouts — has to go to catch up with stronger rivals like JPMorgan Chase & Co.

“You can see how they’re making progress, but there’s a lot more work to do, they don’t look as good as Goldman Sachs right now,” said Matt McCormick, portfolio manager, Bahl & Gaynor Investment Counsel Inc. Citigroup’s shares closed down 5 percent at $4.75.

Citigroup’s securities and banking revenue declined by a third from the same quarter last year to $4.9 billion, while JPMorgan and Goldman Sachs Group Inc both posted big gains in banking.

That decline came as JPMorgan Chase and Goldman Sachs this week posted big increases in investment banking revenue, driven by bond trading.

Goldman had a strong trading performance in areas like corporate debt and stock options. Citigroup cited those same products as sources of weakness.

On a conference call, Chief Financial Officer John Gerspach noted that many troubled fixed-income assets at Citigroup are in a special asset pool, and their rising value would not help results in the securities and banking business even if they do bolster the bottom line.

Citigroup posted a net loss to shareholders of $3.2 billion, or 27 cents a share, compared with a loss of $2.9 billion, or 61 cents a share, a year earlier.

Analysts’ average forecast was a loss to shareholders of 38 cents a share.

COMPLICATED RESULTS

Analysts have struggled to determine when Citigroup will start posting profits from its main businesses. Some have forecast a return to “core profitability” as soon as early next year.

Citigroup has posted more than $100 billion of writedowns and consumer credit losses since the credit crisis began. It posted more than $37 billion of net losses between the fourth quarter of 2007 and the fourth quarter of 2008.

In every quarter this year, the bank has reported net income, but through one-time gains and accounting items.

In the third quarter, the bank posted net income of $101 million after a $1.12 billion tax benefit. But it reported a $529 million loss from continuing operations before taxes. The bottom line for shareholders was negative, including one-time losses from converting preferred shares into common stock.

Results were further muddied by accounting losses that resulted from the bank’s bonds performing better. 

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