{"id":272,"date":"2009-01-16T12:36:05","date_gmt":"2009-01-16T12:36:05","guid":{"rendered":"http:\/\/www.the-finance-zone.co.uk\/?p=272"},"modified":"2009-01-16T12:36:05","modified_gmt":"2009-01-16T12:36:05","slug":"citigroup-to-split-as-losses-grow","status":"publish","type":"post","link":"https:\/\/the-finance-zone.co.uk\/index.php\/2009\/01\/16\/citigroup-to-split-as-losses-grow\/","title":{"rendered":"Citigroup to split as losses grow"},"content":{"rendered":"

<\/p>\n\n\n\n
\n
\"Citigroup<\/p>\n
Citigroup was bailed out by the US government in November<\/div>\n<\/div>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

<\/p>\n

Struggling US banking giant Citigroup has announced plans to split the firm in two, as it reported a quarterly loss of $8.29bn (\u00a35.6bn).<\/strong><\/p>\n

It said it would realign into two new firms, Citicorp and Citi Holdings.<\/p>\n

Citicorp will handle the company’s traditional banking work, while Citi Holdings will take on the firm’s riskiest investment assets.<\/p>\n

Last autumn, Citigroup had to be rescued by the US government in a bail-out deal totalling $45bn. <\/p>\n

The government also agreed to guarantee up to $306bn (\u00a3205bn) of risky loans and securities on Citigroup’s books.<\/p>\n

‘Ongoing efforts’<\/strong><\/p>\n

“Given the economic and market environment, we have decided to accelerate the implementation of our strategy to focus on our core businesses,” said Citigroup chief executive Vikram Pandit.<\/p>\n

<\/p>\n\n\n\n
\"\"<\/td>\n\n
\n
\"\" I’m surprised it’s this bad<\/strong> \"\"\n<\/div>\n<\/div>\n
\n
Matt McCormick, Bahl & Gaynor Investment Counsel<\/div>\n<\/div>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

“This will help in our ongoing efforts to reduce our balance sheet and simplify our organisation.<\/p>\n

“We are setting out a clear roadmap to restore profitability.”<\/p>\n

Citigroup’s net loss for the last three months of 2008 works out at $1.72 per share, worse than analyst expectations of $1.31.<\/p>\n

Its quarterly revenues were down 13% to $5.6bn, which Citigroup said reflected “the impact of a difficult economic environment and weak capital markets”.<\/p>\n

“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.<\/p>\n

Redundancies<\/strong><\/p>\n

For 2008 as a whole, the bank made a net loss of $18.72bn.<\/p>\n

<\/p>\n\n\n\n
\"\"<\/td>\n\n
CITIGROUP SPLIT<\/div>\n
\n
Citicorp – to have responsibility for universal banking operations<\/div>\n
Citi Holdings – to take on the firm’s brokerage and investment interests, and a special pool of loss-making assets<\/div>\n<\/div>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

It blamed the losses on having to write-off bad debt and the cost of making redundancies.<\/p>\n

The firm cut 52,000 jobs last year as its losses mounted against the backdrop of the sharp downturn in the US mortgage market and the resulting global credit crunch.<\/p>\n

“We are committed to helping the financial markets recover as quickly as possible,” added Mr Pandit.<\/p>\n

The firm added that it also expected further departures from its board of directors.<\/p>\n

It was announced last week that director Robert Rubin, a former US Treasury Secretary is to leave the firm.<\/p>\n

Source: bbc.co.uk<\/p>\n","protected":false},"excerpt":{"rendered":"

Citigroup was bailed out by the US government in November Struggling US banking giant Citigroup has announced plans to split<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"colormag_page_container_layout":"default_layout","colormag_page_sidebar_layout":"default_layout","footnotes":""},"categories":[2],"tags":[],"class_list":["post-272","post","type-post","status-publish","format-standard","hentry","category-banking"],"_links":{"self":[{"href":"https:\/\/the-finance-zone.co.uk\/index.php\/wp-json\/wp\/v2\/posts\/272","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/the-finance-zone.co.uk\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/the-finance-zone.co.uk\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/the-finance-zone.co.uk\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/the-finance-zone.co.uk\/index.php\/wp-json\/wp\/v2\/comments?post=272"}],"version-history":[{"count":0,"href":"https:\/\/the-finance-zone.co.uk\/index.php\/wp-json\/wp\/v2\/posts\/272\/revisions"}],"wp:attachment":[{"href":"https:\/\/the-finance-zone.co.uk\/index.php\/wp-json\/wp\/v2\/media?parent=272"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/the-finance-zone.co.uk\/index.php\/wp-json\/wp\/v2\/categories?post=272"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/the-finance-zone.co.uk\/index.php\/wp-json\/wp\/v2\/tags?post=272"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}