NY Times: Citi Posts $9.83 Billion Loss; Will Cut Jobs

[marmar]

Citi Posts $9.83 Billion Loss; Will Cut Jobs


By ERIC DASH
Published: January 15, 2008


Citigroup announced a steep cut in its stock dividend and another big investment by foreign investors on Tuesday after taking more write-downs related to subprime securities and posting a $9.83 billion loss for the fourth quarter.

Beginning what is expected to be a grim week for financial company earnings, Citigroup said it was writing down $22.2 billion because of soured mortgage-related investments and bad loans. The bank is also cutting its dividend by 41 percent and obtaining a $12.5 billion cash infusion to strengthen its balance sheet, including big investments by its former chairman, Sanford I. Weill, and the Government of Singapore Investment Corporation.

Facing rising expenses and deepening losses, Citigroup is expected to embark on a major cost-cutting campaign that could result in at least 4,000 layoffs. And thousands more could be in the offing in the coming months.

The write-downs caused Citigroup to swing to a loss for the fourth quarter. The fourth-quarter loss translated into $1.99 a share, compared with a profit of $5.1 billion, or $1.03 a share, in the period a year earlier. Revenue fell 70 percent, to $7.22 billion from $23.83 billion.

The write-downs included $18.1 billion from a sharp drop in the value of mortgage-related securities and heavy trading losses. The company also set aside an additional $4.1 billion to cover expected losses from bad loans.

For the full year, Citigroup reported that net income dropped 83 percent, to $3.62 billion, or 72 cents a share, compared with 2006 profit of $21.53 billion, or $4.31 a share. Revenue fell 9 percent, to $81.7 billion in 2007.

Investors sent Citi’s stock lower in morning trading. After about an hour of trading, the shares were at $27.42, down $1.64, or 5.6 percent. ......(more)

The complete piece is at: http://www.nytimes.com/2008/01/15/business/16citi.html?_r=1&hp&oref=slogin

[ramapo]

1. That is a lot of money

Mind-boggling really. But I guess compared to $21B profit LY, it's not so bad.

[rhett o rick]

2. Doubt if it will effect CEO's bonus tho. Citibank gambling with our money. nm

[rurallib]

3. I believe the jobs I would start with would be at the top

[go west young man]

4. Rather than let that money come out of taxpayers pockets

why not take the money from the CEO? He's the one who gambled and lost. What a fucked up system that actually rewards crap behavoir.