Pandit decides to split Citi after $8.29 bn loss in Q3

Font Size

Print

Feedback

Email

Discuss

Related Articles

PNB for stake in Kazakhstan-based bankICICI Bank raises $750 mn through bond issueSBI Card launches mShopRBI fixes reference rate for US dollar and Euro

New York: Citigroup Inc unveiled a broad restructuring plan designed to shed weaker businesses and troubled assets, and also reported an $8.29 billion fourth-quarter loss, its fifth straight quarterly loss.

The company also said on Friday that it anticipated more departures from its board, which is losing Robert Rubin as a director later this year. Nevertheless, Citigroup shares rose 8.6 per cent to $4.16 in premarket trading.

Citigroup's fourth-quarter loss equaled $8.29 billion, or $1.72 per share, and compared with a year-earlier loss of $9.8 billion, or $1.99 a share.

"I think people knew it was going to be bad, but I'm surprised it's this bad," said Matt McCormick, portfolio manager at Bahl & Gaynor Investment Counsel in Cincinnati.

The bank said it was splitting into two operating units, one of which will focus on universal banking, the other on brokerage and retail asset management, local consumer finance, and a pool of assets that require special management.

Revenue fell 13 per cent to $5.6 billion, reflecting weak capital markets. The company's global credit card business saw revenue decline 27 per cent on weakness in North America.

Consumer Banking revenues declined 22 per cent, driven by a 47 per cent drop in investment sales. And its institutional clients group, securities and banking revenues were negative $10.6 billion, mainly due to net losses and write-downs of $7.8 billion.

"Our results continued to be depressed by an unprecedented dislocation in capital markets and a weak economy," Chief Executive Vikram Pandit said.