Citigroup said today its quarterly profits rose 16 per cent, as low US interest rates drove up revenues at its consumer banking businesses.
Eleven interest rate cuts by the US Federal Reserve last year encouraged consumers to use credit cards and take out mortgages. This helped Citigroup's consumer arm, despite other problems in the quarter like Citigroup's loans to bankrupt energy trader Enron Corp.
Citigroup, which runs banking, brokerage and insurance operations in more than 100 countries, also benefited from its global reach except in Argentina, which is in the throes of a financial crisis. There, Citigroup took losses on bonds and loans amid the country's planned currency devaluation.
The New York-based company earned $3.86 billion in the fourth quarter, compared with $3.33 billion in 2000.
Results include $228 million hit from Enron and a $470 million hit from Argentina's economic woes in the quarter.
Profits at Citigroup's consumer arm, which includes credit cards and mortgages, rose 20 per cent to $2.03 billion in the fourth quarter from the 2000 quarter.
At Citigroup's global corporate division, which includes its investment and corporate banking business, profits rose 4 per cent to $1.32 billion. The unit cut expenses, helping growth.
Its investment portfolio reported a $279 million gain in the fourth quarter compared to gains of $194 million in the 2000 quarter.