RBS preferreds erase early losses, end strong as company posts profit; Citigroup eyed

By Stephanie N. Rotondo

Phoenix, Oct. 31 – It was slow going in the preferred stock market Friday, even in Royal Bank of Scotland Group plc paper as the company reported a third-quarter profit.

Initially, that swing to a profit didn’t do much to help the Edinburgh, Scotland-based bank’s preferreds, which were mostly weaker in early trading. However, they finished the day with a firmer tone.

The 5.9% noncumulative guaranteed trust preferred securities (NYSE: RBSPE) closed up 6 cents to $23.90. At mid-morning, the preferreds were off 6 cents at $23.78.

For the quarter, the bank reported a profit of £896 million, which compared to a net loss of £828 million the year before. However, the results were weighed down as the company set aside £780 million to cover any fines and settlements that may result from a currency market investigation.

Citigroup Inc.’s preferreds were also moving higher following the bank’s own amended earnings release late Thursday.

The 5.8% series C noncumulative preferreds (NYSE: CPC) closed up 4 cents to $24.20. The 7.875% fixed-to-floating rate trust preferred securities (NYSE: CPN) improved 2 cents to $26.62.

The7.125% series J fixed-to-floating rate noncumulative preferreds (NYSE: CPJ) gained a penny to end at $27.06.

Citigroup put out numbers on Oct. 14, but amended those figures on Thursday to reflect a $600 million increase in legal costs.

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