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Bancorp and Citicorp show dramatic recovery

John Willcock
Tuesday 20 April 1993 18:02 EDT
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THE gathering recovery in the US economy brought good news for National Westminster Bank yesterday, when its American subsidiary, Natwest Bancorp, announced a doubling in profits from dollars 30.1m to dollars 60.7m for the first quarter of 1993, writes John Willcock.

The results, which included dollars 9.5m in federal tax benefits previously unrecorded, reflected a trend of five quarters of steadily improving profitablity.

The US banking giant Citicorp also reported doubled quarterly profits yesterday, pounds 370m for the first three months of 1993, compared with dollars 183m in the previous year.

Bancorp's problems have long been a thorn in the side of the UK clearing bank. NatWest sent out John Tugwell from London as Bancorp's chairman and chief executive specifically to turn the subsidiary around. 'We are delighted with our improvement. We have put a difficult period behind us and are now building on a very strong recovery,' he said yesterday.

Bancorp's profit surge came despite virtually unchanged provisions against loan losses of dollars 30m.

Citicorp's recovery was equally dramatic. Its shares are now trading at about dollars 30 against dollars 8 two years ago, when its losses hit an all-time high. John Reed, chairman, said yesterday that profits came after a pre-tax charge of dollars 64m for costs associated with withdrawal from portfolio management in India following the bank's involvement in the Bombay stock exchange scandal.

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