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| Citigroup sees second giant loss |
| Citigroup has suffered a second massive loss and is cutting 9,000 jobs as the credit crisis continues to take its toll on the biggest US bank
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| UNITED STATES OF AMERICA
, 18-April-2008
10:29:50 AM |
| It made a loss of $5.11bn (£2.7bn) in the first quarter, although this was smaller than the $9.8bn loss reported in the final three months of 2007.
The results included about $12bn of write-downs for sub-prime mortgages and other risky assets.
Lenders worldwide have written off more than $200bn hit by the credit crisis.
The job cuts are on top of 4,200 layoffs announced in January.
Citigroup employs about 369,000 employees worldwide, with 11,000 based in London.
"Our financial results reflect the continuation of the unprecedented market and credit environment," said Citigroup chief executive Vikram Pandit.
Only Switzerland's UBS has reported bigger write-downs and credit losses than Citigroup from the collapse of the sub-prime mortgage market.
'Cathartic quarter'
The loss was slightly deeper than many analysts had expected but European and US stock markets rose in relief there were no nasty surprises.
"It's a cathartic quarter," said Arthur Hogan, chief market analyst at Jefferies & Co in New York.
Citigroup shares rose in early trade on Wall Street.
"The market is shrugging it off. We knew there were going to be write-offs and [Citigroup] hasn't yet said anything far too negative," said Andrea Williams, head of European equities at Royal London Asset Management.
Earlier this week, Citigroup rival Merrill Lynch said it lost $1.96bn in the first quarter of 2008 and unveiled plans to cut about 4,000 jobs worldwide.
Merrill's results included about $4.5bn of sub-prime related write-downs.
Revenue halves
Citigroup's revenues plunged 48% to $13.2bn as the firm wrote-down the value of assets linked to sub-prime mortgages - those given to people with poor or patchy credit histories.
Of the write-downs, $6bn was directly related to the sub-prime market, with the remainder due to other assets and exposure affected by the credit crisis.
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