Citigroup posts $18 Bn writedowns amid subprime fallout

Tuesday, 15 January 2008, 20:30 IST
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New York: The U.S. based financial institution, Citigroup announced Tuesday record writedowns of $18.1 billion in the fallout of the subprime mortgage crisis. The New York-based company reported a net loss of $9.83 billion or 1.99 dollars per share in the fourth quarter of 2007. Full-year 2007 revenues fell nine percent to just under $81.7 billion, while net income plunged 83 percent to $3.62 billion, Citigroup said. "Our financial results this quarter are clearly unacceptable," said Citigroup Chief Executive Officer Vikram Pandit, who blamed the companies woes on the subprime exposure and an increase in credit costs in the company's domestic loan business. Revenue growth in other Citigroup businesses and in the international section was strong, Pandit said, giving international consumer, transaction services, wealth management, and advisory portfolios as examples. Among the actions Pandit named to restore the group's fortunes was the investment in the company of "several long-term sophisticated investors" who are providing a $12.5-billion capital infusion. Another $2 billion is gained through the issuance of a convertible bond on the market. Additional steps included slashing dividends by more than 40 per cent and "divesting non-core assets and businesses." According to U.S. media reports Citigroup Inc is looking to cut more than 20,000 jobs, or about 6 per cent of its workforce, and reduce its dividend by as much as 20 billion dollars.
Source: IANS
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