Citigroup posts loss of $7.6 billion in last three months of 2009
Wednesday, January 20, 2010
The bailed-out banking giant Citigroup lost $7.6 billion in the final three months of last year, underscoring the firm's continuing troubles with bad mortgages and credit card loans as it tries to wrest itself from the hands of taxpayers.
The loss pushed the bank into the red for the full year and solidified its standing as one of the largest and most wounded firms to survive the financial crisis.
Although several other banks have capitalized on Wall Street's rebound to pay back the government and relieve themselves of partial taxpayer ownership, more than a quarter of Citigroup is still owned by taxpayers.
The firm, which has been retrenching after years of aggressive growth, posted a $1.6 billion loss for the year.
The company's vast portfolios of home loans and credit card loans continued to deteriorate despite the economic recovery.
"U.S. consumer credit remains as the key remaining issue," Vikram Pandit, Citigroup's chief executive, said Tuesday in a conference call.
Despite the mounting losses on loans, the company said there are enough signs of stabilization to give it confidence that it will not need as much money to cover losses in the quarter as it did during the same period in 2008. Citigroup set aside $8.18 billion.
The quarterly loss of 33 cents per share was less than the $3.40 per-share loss ($17.3 billion) a year ago, and the annual loss was less than the $27.7 billion loss recorded in 2008.
By contrast, the bank J.P. Morgan Chase last week posted a $11.7 billion profit for 2009.
J.P. Morgan shares Citigroup's exposure to consumer credit losses but has made big profits in its investment banking and trading divisions.
After generating profits earlier last year in these businesses, Citigroup has not been able to keep up the pace.
The bank's losses illustrate in part why it has struggled to rid itself of partial government ownership.