Citi still struggling with failed loans; earnings disappoint investors

Citigroup (C) provided a sobering reminder Thursday that the economy is still struggling, reporting that its third quarter results were weighed down by billions of dollars in failed loans.

The bank reported a $101 million profit before accounting for $288 million in preferred stock dividends and the debt exchange offer that give the government a 34 percent stake in the bank. The exchange offer, which gave Citigroup a better mix of capital to withstand additional loan losses and further weakening in the economy, took earnings down $3.06 billion.