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Consumer lending underpins strong Q4 in US

Consumer lending underpins strong Q4 in US

(27 January 2004 – USA) Major banks in the US have reported strong fourth quarter profits built primarily on increased consumer loan demand. The largest of these, Citigroup, said its fourth quarter year on year profit almost doubled. The bank posted a full year profit of US$17.9 billion, a 17 percent increase on the previous year with revenue rising nine percent to $77.4 billion. Net income rose 96 percent to $4.76 billion from $2.43 billion in 2002.

The bank took a $242 million profit hit in the third quarter due to exposure to failed Italian food group Parmalat.

The fourth largest bank in the US, Wells Fargo & Co, saw its fourth quarter profit rise ten percent with income increasing to $1.62 billion from $1.47 billion the previous year.

Wells Fargo attributed the strong performance to consumer loans growth and portfolio restructuring.

Chief financial officer Howard Atkins said average loans increased 31 percent to $236 billion. He said there were signs of a modest turnaround in commercial lending.

JP Morgan Chase’s recent $58 billion purchase Bank One reported a net income of $978 million compared with $842 million a year earlier.

In further US banking news, Bank of America has revealed that an account purportedly holding $7.7 billion of Parmalat funds never existed despite a lawyer representing Parmalat creditors claiming the contrary.

The bank said it had carried out an internal investigation into the lawyer’s claim that the money was sitting in one of Bank of America’s New York branches but found nothing.

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