Citgroup loses $7.6 Billion in fourth quarter

citigroup

Battered financial giant Citigroup said Tuesday it suffered a net loss of 7.6 billion dollars in the fourth quarter of 2009, resulting in a full year loss of 1.6 billion dollars.

Citigroup said its fourth quarter revenues were 5.4 billion dollars, or 15.5 billion dollars excluding a repayment of a government bailout loan, down from 20.4 billion dollars in the prior quarter.

The quarterly result amounted to a loss of 33 cents a share, in line with forecast by Wall Street analysts.

Citigroup, which is the last of the major money-center banks operating in the shadow of a US government bailout, last month repaid some 20 billion dollars to the authorities.

It repurchased preferred shares from a US Treasury investment in the company through the Troubled Asset Relief Program (TARP), a massive 700 billion dollar effort to stabilize the financial system. But the government still holds a major stake in Citi from having converted some of its investment to common shares.

Citigroup said provision for loan losses in the fourth quarter was 8.2 billion dollars, down 36 percent from the prior year and 10 percent from the previous quarter.

Chief executive Vikram Pandit said a series of steps were taken to get the “house in order,” citing improved capital strength, reduction in company size and staff, refocused business strategy and overhauling risk management that cut costs by over 13 billion dollars annually.

“As we enter 2010, we are strongly capitalized, significantly more efficient, and are executing on a clear strategy that is focused on clients,” he said.

Pandit said that in the near term, the company would continue to focus on “sustainable profitability and growth, and supporting the global economic recovery.”

John Gerspach, Citigroup’s chief financial officer, said although the company remained cautious and continued to monitor the future impacts of its “loss mitigation” efforts, there were “indications that credit may be stabilizing or improving, particularly in Asia and Latin America.”

Last week, JPMorgan Chase opened the US earnings season for banks, quadrupling its fourth quarter net earnings to 3.27 billion dollars and doubling its profits for the full year to 11.7 billion dollars.

Its chief executive, Jamie Dimon, said he was “gratified” by the results but lamented consumer credit costs remained high.

Published: Tuesday January 19, 2010

Source: AFP

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