(20 January 2009 – USA) Citi has revealed a significant US$8.29 billion fourth quarter loss, taking the full year losses for the bank to US$18.72 billion.In a tumultuous year, Citi’s profits were impacted by a range of factors, including revenue reduction and write downs to cost cutting exercises and a significant fall in headcount.
Revenue for the final quarter was down 13 percent to US$5.3 billion, with the biggest hit coming from the Institutional Clients Group, where the Securities and Banking revenues were negative US$10.6 billion, primarily due to write downs, adjustments to derivate positions and losses in private equity and investments.
One business unit managed an increase in revenue. Transaction Services revenues were up 4 percent to US$2.4 billion, reflecting double-digit revenue growth in the Treasury and Trade Solutions unit.
Despite the losses, Citi’s deposit base remained stable compared to the third quarter 2008.
Expenses excluding restructuring and repositioning charges were down 4 percent since the third quarter 2008 and 14 percent since the fourth quarter 2007.
A staff reduction was among the cost cutting initiatives to get expenses down. Headcount reduced by approximately 29,000 since the third quarter 2008 and approximately 52,000 in the full year 2008.
Citi was also able to make some profit back from the sale of specific operations including the German retail unit, while the recent Morgan Stanley Smith Barney Joint Venture is set to result in a pre-tax gain for the second half of 2009.
Vikram Pandit, chief executive officer of Citi said that Citi’s current focus was on strengthening capital, reducing balance sheet and expenses, as well as reducing risk.