NEW YORK — The news from Citigroup was surprising and, for a change, upbeat.
The struggling bank was profitable through the first two months of the year, chief executive Vikram Pandit told employees in a letter. And it’s having its best quarter since late summer 2007 — the last time it posted a profit.
The memo helped power Wall Street’s best day of 2009 as Citigroup shares soared 38 percent and sent other financial-company stocks barreling higher. But investors’ fears are far from quelled about Citi and the broader banking business. The company’s stock is still trading near the all-time low of 97 cents a share it fell to last week, and Bank of America, also seen as having been in a precarious position, is still below $5 a share.
Citigroup remains down more than 60 percent since the government came to its rescue in November. It’s actual earnings are due to be released in April.
Although the stock market was pleased, some analysts said Pandit’s letter wasn’t enough to sustain a longer-term advance. One-time items, including credit losses, write-downs and additions to loan-loss reserves, could end up bringing Citigroup to its sixth straight quarterly loss if March is worse than January and February.
“It’s a PR gimmick,” said Alois Pirker, bank analyst at the research and advisory firm Aite Group. “This memo alone won’t do the trick. For Citi, it’s the same old problems: How do we take this business and turn it into a viable entity?”
Bank of America CEO Ken Lewis has been on the offensive, too, making an appearance on CNBC and sending reassuring memos to his employees.
