Citigroup Inc. suffered its fourth straight quarterly loss due to credit-related missteps and cut another 11,000 jobs.
The New York-based bank said Thursday that it lost $2.8 billion, or 60 cents per share, in the third quarter, compared with a profit of $2.2 billion, or 44 cents per share, a year ago. That deficit for the June-to-September period brings Citi’s total losses over the past 12 months to $20.2 billion.
The shortfall for the quarter was narrower than anticipated. Analysts polled by Thomson Reuters expected a loss of 70 cents per share.
But the results were hardly reassuring. Citi wrote down $4.4 billion in investments, recorded $4.9 billion in credit losses, and took a $3.9 billion charge to boost reserves. The bank has written down the value of its investments in souring mortgages and other debt by more than $50 billion since this time last year.
“While our third quarter results reflect both a difficult environment as well as continued write-downs on our legacy assets, we are making excellent progress on the parts of our business we control, including expense reduction, headcount, and balance sheet and capital management,” said CEO Vikram Pandit in a statement. “We expect these improvements will enable us to realize the full earnings power of our franchise as the economy stabilizes.”
The frailty of the financial system has led the government to pledge $25 billion to each of the big four U.S. banks — Citigroup, JPMorgan Chase & Co., Bank of America Corp. and Wells Fargo & Co. Of these four institutions, Citi appears to be on the shakiest footing. It is the only one to have posted quarterly losses over the past year, and it is shrinking while its peers are growing.
Citi not only eliminated 11,000 jobs during the third quarter — bringing its total headcount reduction so far this year to 23,000 — but it also shed $50 billion in assets. Pandit announced in May that Citi intends to rid itself of nearly $500 billion in assets to get out of businesses such as risky mortgages; the bank said that over the past year, it has lopped off $308 billion in total assets.
Meanwhile, the bank has not made any major acquisitions. While JPMorgan Chase snapped up Bear Stearns Cos. and Washington Mutual Inc., and Bank of America Corp. bought Merrill Lynch, Citigroup lost a bid for Wachovia Corp. and its massive deposit base to Wells Fargo.