Citigroup announces $7.6-billion loss in fourth quarter
Citigroup had its worst quarter of 2009, losing $7.6 billion in the final quarter of the year, or 33 cents per share, due in large part to the company’s swift push to leave the government’s Troubled Asset Relief Program.
Citigroup announced this morning that it lost $1.6 billion in 2009, with the majority of losses coming during the difficult fourth quarter. The company’s local consumer lending division lost $233 million more than in the third quarter, providing further indication of the difficulty consumers are having in paying off mortgages and credit cards.
It was, however, Citigroup’s decision to leave the government assistance program that led to the sharpest losses in the quarter -- $10.1 billion, according to the company. Citigroup’s decision in December to pay back the remainder of the $45 billion that it received during the financial crisis was controversial, in part because it diluted the stake of shareholders in the company. The moves during the fourth quarter led to a loss for the year of an 80 cents per share. This was worse than what analysts had predicted.
Citigroup shares were up 3 cents this morning to $3.45.
Citigroup was able to point to improvements from a year ago, during the darkest days of the financial crisis. The company’s losses in the fourth quarter of 2009 were nearly $10 billion less than in the same quarter of 2008. But Citigroup’s continuing losses indicate its difficulties in recovering from the financial crisis. This is in contrast to some others banks such as JP Morgan & Chase, which announced big quarterly earnings last Friday. The new numbers from Citigroup will put more pressure on the company’s embattled chief executive Vikram Pandit.
Pandit said this morning that asset sales and structural changes undertaken during the last four months were helping to speed the company’s recovery. “It was our responsibility to get our own house in order,” he said in a statement.
Just days before the earnings report, the head of Citigroup’s consumer banking division announced that she was leaving the company. The company also shed 11,000 employees during the quarter.
The company’s struggles do not appear to be hurting the remaining employees. Citigroup put aside $6.3 billion in the fourth quarter to compensate its employees, an increase from the previous quarter. Citigroup did not follow the lead of JP Morgan, which decreased its compensation pool in the fourth quarter after a public uproar over banker bonuses. Pandit, Citigroup’s CEO, has already said he will forgo a bonus for 2009.
