Harry Potter grows up and gets a job

October 15th, 2009
Citi?s hocus-pocus

Wall Street pay czar Ken Feinberg should give Vikram Pandit a pay raise. The Citigroup chief executive has certainly earned it based on his mastery of the dark arts and alchemy.
It takes sheer wizardry to announce simultaneously a small $101 million profit and a loss of 27 cents a share for the same quarter. It takes a little sleight of hand to disclose a quarter-to-quarter increase in the number of retail bank branches, but a small decline in the number of customer accounts at those branches.
Want some more magic? In the third quarter, Citi absorbed $8 billion in credit losses as the bank continues to get rocked by delinquencies and defaults on consumer and commercial loans. But even in the face of those losses, the bank added only $802 million to its overall loan loss reserve ? some $3.1 billion less than it set aside in the second quarter.

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