Pandit set to report first profit as Citigroup CEO

NEW YORK: Vikram Pandit is poised to report Citigroup’s first annual profit since he took over as chief executive officer three years ago, relying on trading and consumer banking to counter a drop in underwriting and mergers.

Citigroup, which took a $45 billion taxpayer bailout in 2008, may report net income of about $2.19 billion for the fourth quarter, based on a survey of 11 analysts’ estimates. That would bring full-year earnings for the New York-based company to $11.5 billion, the most since 2006. Pandit’s bank lost $29.3 billion during his first two years in charge.

“It’s a sign that the pain that Vikram inherited and endured over recent years has finally turned a corner,” said Charles Peabody, an analyst with New York-based Portales Partners who recommends investors buy Citigroup shares. Pandit, who turned 54 on Friday, is capping a year in which Citigroup’s stock surged 43%.

That gain followed a 90% tumble from December 11, 2007, when Pandit took over, through the end of 2009. Earnings rebounded as Citigroup, which reports results on January 18, more than doubled fixed-income and equity-trading revenue in the fourth quarter to about $4.5 billion, according to a December estimate by David Trone, an analyst with New York based JMP Securities.

Bank of America, which reports next week, could post $2.61 billion, according to the average of analysts’ estimates. Most of the biggest banks benefited from gains in investment-banking and trading revenue during 2010, which probably climbed to the second-highest ever for the year, according to data.