How A Bank Can Screw Financial Markets


Today we present the interesting story of Citigroup, here is an interesting trick for everyone that wants to start his adventure in the banking system without telling anyone that he is actually losing everyone’s money

Well well well, Citigroup has published Q2 earnings, and they look awesome.

The interesting thing is that, 20 minutes before the huge announcement (the consensus EPS was equal to $1.05, and today Citi revealed an EPS equal to $1.24: amazing), Reutersreported the news of a 7 billion dollars fine on Citigroup to settle a US investigation.

So, guess what ?

Considering the 7 billion fine, the actual EPS should be equal to $0.03: a disaster.

But here comes the genius, someone at Citigroup just said: “Hey, we know they are going to fine us, so let’s just write two different earning reports, one with the fine, and another one without”

And there you are:

Which means that the revenues actually declined by 4%:

From the bank release:

“Citigroup’s net income declined to $181 million in the second quarter 2014 from $4.2 billion in the prior year period. Excluding CVA/DVA and the impact of the mortgage settlement, Citigroup net income of $3.9 billion increased 1% versus the prior year period driven by lower operating expenses and a decline in credit costs, partially offset by lower revenues.”

But the thing that will make you laugh is the market reaction:


Don’t worry, when the market will realize it too, the stock will go down too.

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