The banking industry is still being hit hard and is still struggling to survive, but some profits in the industry were an unexpected surprise, as everyone expected to see losses.

Citigroup has seen $4.3 billion in profits, but this included a pre-tax gain of $11 billion for the sale of its majority stake in the brokerage unit Smith Barney, which was sold to Morgan Stanley. Citigroup also had to set aside $12.68 billion to cover loan losses, and has had to cut 30,000 jobs this last quarter.

Bank of America has seen $3.2 billion in profits but made $5.3 billion in selling assets – particularly its stake in China Construction Bank. Chief Exectuvie Ken Lewis said, “difficult challenges lie ahead from continued weakness in the global economy, rising unemployment and deteriorating credit quality that will affect our performance for the rest of the year and into 2010.” Bank of America’s non-performing loans totaled $31 billion this year.

Both of these companies received more than $40 billion in bailout funds and guarantees on hundreds of billions if distressed assets. This money came with strings attached to place these banks under the supervision of the Troubled Asset Relief Program, which banks like Goldman Sachs and JPMorgan will not have to deal with.

Bank of America has already said they will need to pay back the $45 billion in TARP funds in installments as they won’t be allowed to do it all at once. The government had forced nine of the top U.S. banks to take these TARP funds even if they did not want them so that no bank was looked at as weaker than the others. However, banks like Goldman Sachs and JPMorgan have already repaid the TARP funds, which banks like Citigroup and Bank of America have been unable to do yet.

Related to Government Efforts to Flog Financial Industry have Failed

JPMorgan sees Profits from Investment Banks as Defaults Rise

For the first time since 2007, JP Morgan Chase & Company has seen profits rise from investment-banking fees. The second-quarter earnings of JPMorgan increased to ...

Interest Rates

Interest rates An interest rate is a value mortgage which pays for the usage of money they do not posses. For example, a small firm ...

Certificate of Deposit

Certificate of deposit is immune to financial crisis? The financial crisis of the year 2007 - 2009 is also referred to as ‘credit crisis’ and ...

Time to Invest in Mutual Funds is Now

Recent turmoil in the market has all of us pretty scared about what to do with our money. Should we invest? Should we save? Should ...

2.51% APY Savings Account Offering of Beverly National

2.51% APY Savings Account Offering of Beverly National Clearly, Beverly National’s offering of 2.51% annual percentage yield (APY) is something that will out-earn other offers ...