US banking group loses US$2,5 billion

NEW YORK – Citigroup on Friday posted a net loss for the past quarter of US$2,495 billion dollars as the troubled banking giant was forced to take more hefty write-offs from US real estate losses.

But the loss, amounting to 54 cents a share, was not as bad as feared on Wall Street, where analysts had been expecting a deficit of 61 cents a share. Citi, one of the world’s biggest banks, said it wrote off an additional US$7,2 billion in securities and banking, largely from soured property market bets.The net loss marked a sharp turnabout from a profit of US$6,2 billion in the same period a year earlier.Revenues for the second quarter fell 29 per cent to US$18.7 billion, hurt by the write-offs.Vikram Pandit, the chief executive named in December in a shake-up following hefty losses, said the banking firm has made progress in cleaning up its finances and shoring up capital through sales on non-core operations.”We continue to demonstrate strength in our core franchise,” he said.”We cut our second quarter losses in half compared to the first quarter.The cost of credit increased by 20 per cent from the first quarter, but write-downs in our Securities and Banking business dropped by 42 per cent.Additionally, headcount and expenses declined sequentially.While there is still much to do, we are encouraged by our progress in delivering on our commitment to the re-engineering efforts.”Citigroup shares have plunged over 60 per cent in the past year on fears of further losses from the US housing meltdown, but have rebounded in recent weeks.Shares closed Thursday at US$17.97.The company has offloaded its pension arm CitiStreet and its German retail banking operations, among others, to raise cash.As part of the shake-up, Citi shed some 6 000 jobs in the past quarter, bringing to 11 000 its cuts since the start of 2008.The restructuring has slashed the company’s assets by some US$99 billion.”We continue to be focused on building the strongest team by attracting world class leaders to Citi and developing our current talent.This, combined with a sharp focus on customer relationships in all regions and an ongoing commitment to our strategic targets, will drive our earnings power going forward,” said Pandit.Nampa-AFPCiti, one of the world’s biggest banks, said it wrote off an additional US$7,2 billion in securities and banking, largely from soured property market bets.The net loss marked a sharp turnabout from a profit of US$6,2 billion in the same period a year earlier.Revenues for the second quarter fell 29 per cent to US$18.7 billion, hurt by the write-offs.Vikram Pandit, the chief executive named in December in a shake-up following hefty losses, said the banking firm has made progress in cleaning up its finances and shoring up capital through sales on non-core operations.”We continue to demonstrate strength in our core franchise,” he said.”We cut our second quarter losses in half compared to the first quarter.The cost of credit increased by 20 per cent from the first quarter, but write-downs in our Securities and Banking business dropped by 42 per cent.Additionally, headcount and expenses declined sequentially.While there is still much to do, we are encouraged by our progress in delivering on our commitment to the re-engineering efforts.”Citigroup shares have plunged over 60 per cent in the past year on fears of further losses from the US housing meltdown, but have rebounded in recent weeks.Shares closed Thursday at US$17.97.The company has offloaded its pension arm CitiStreet and its German retail banking operations, among others, to raise cash.As part of the shake-up, Citi shed some 6 000 jobs in the past quarter, bringing to 11 000 its cuts since the start of 2008.The restructuring has slashed the company’s assets by some US$99 billion.”We continue to be focused on building the strongest team by attracting world class leaders to Citi and developing our current talent.This, combined with a sharp focus on customer relationships in all regions and an ongoing commitment to our strategic targets, will drive our earnings power going forward,” said Pandit.Nampa-AFP