'Enormous progress' as bank loses £4.7bn

US banking giant Citigroup reported a full-year loss today but hailed "enormous progress in 2009".

Citi, which employs 9,000 staff in the UK, posted an annual net loss of 1.6 billion US dollars (£980 million), down from 27.7 billion dollars (£16.9 billion) in 2008.

The bank said employee pay and benefit expenses were down 20% compared to the previous year, to 25 billion dollars (£15.3 billion) - although it has reduced its direct headcount by almost 100,000 since the start of 2008.

In the second major banking report from Wall Street this month, the firm said it had repaid 20 billion dollars of loans that it received from the US government.

Citi's losses for the fourth quarter were 7.6 billion dollars (£4.7 billion), including the government payback.



Citi was hit hard by the credit crisis and recession, receiving 45 billion dollars (£27.5 billion) in bailout money.

It raised the 20 billion dollars in new capital during the fourth quarter to repay bailout funds.



Meanwhile the US government converted 25 billion (£15.3 billion) of the bailout money into a 34% stake in the bank and it said last month it would sell its shares over the next year.



Citi has failed to see the upswing enjoyed by some of its rivals, who have ridden a wave of better investment banking results, helping them offset their losses from bad loans.



Its report is the latest in a run of Wall Street big hitters to report results as the major US players reveal how they fared in the year after the Lehman Brothers collapse.



Last week, JP Morgan Chase produced forecast-beating results showing profits more than doubling to 11.7 billion US dollars (£7.2 billion).



But public focus is on bonus plans, with significant payouts risking outrage from taxpayers who helped prop up the industry during the financial crisis.



President Barack Obama has set out plans to claw back 90 billion US dollars (£55 billion) in taxes over 10 years and attacked "obscene" payouts, promising to retrieve "every dime" for the taxpayer.



In the UK there is now a 50% windfall tax on bonuses over £25,000 and major City firms are thought to be gearing up to absorb all or part of the cost of the tax.



This could mean Chancellor Alistair Darling is able to rake in more than the £500 million currently predicted.



Chief executive Vikram Pandit said: "We have made enormous progress in 2009.



"It was our responsibility to get our own house in order. We greatly improved Citi's capital strength, reduced the size and scope of the company, and refocused our business strategy to take advantage of our unmatched global network."



Citi said without the government loan repayment it would have made a net loss in the fourth quarter of 1.4 billion dollars (£857 million).



The New York-based company, which counts the online bank Egg among its stable of brands, set aside 8.18 billion dollars (£5 billion) to cover soured loans during the fourth quarter.



But the firm said its provision for loan losses declined 10% from the previous quarter and 36% from a year earlier at the peak of the credit crisis.



Chief financial officer John Gerspach said the environment "continues to be challenging".



"Although we remain cautious and continue to monitor the future impacts of our current loss mitigation efforts, we continue to see indications that credit may be stabilising or improving, particularly in Asia and Latin America," he added.



Citi tried to reorganise and streamline its operations in 2009 as it struggled to return to consistent profitability.



This included splitting the business into two units, Citicorp and Citigroup Holdings.

Start your day with The Independent, sign up for daily news emails
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
peopleMathematician John Nash inspired the film Beautiful Mind
News
Richard Blair is concerned the trenches are falling into disrepair
newsGeorge Orwell's son wants to save war site that inspired book
Life and Style
Audrey Hepburn with Hubert De Givenchy, whose well-cut black tuxedo is a 'timeless look'
fashionIt may be a paradox, but the industry loves it
Arts and Entertainment
The pair in their heyday in 1967
music
Life and Style
fashionFrom bathing dresses in the twenties to modern bikinis
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine