Citigroup reports $5.1 billion loss on hefty write-downs
<div class="byline">By MADLEN READ, AP Business Writer</div>
<div class="news_date">2 HOURS AGO</div>
<p>NEW
YORK - Citigroup Inc. lost $5.1 billion during the first quarter and
will eliminate about 9,000 more jobs, as poor bets on mortgages and
leveraged loans lopped billions of dollars from its investment
portfolio.</p><p>Write-downs related to mortgages and turmoil in the
credit markets reached about $12 billion, and costs stemming from
consumers' credit problems surpassed $3 billion, the bank said Friday.
And in a conference call with analysts, Citigroup chief financial
officer Gary Crittenden said the bank, seeking to cut costs, is
eliminating about 9,000 additional jobs.</p><p>That means Citigroup has
announced 13,200 job cuts in all, following an announcement in January
that the bank was cutting 4,200 jobs. And more work-force reductions
may be on the way.</p><p>The most recent quarterly shortfall at the
nation's biggest bank by assets was not as massive as the nearly $10
billion loss it suffered in the fourth quarter of last year, though.</p><p>Citigroup
shares jumped more than 6 percent, or $1.52, to $25.55 at the open of
trading Friday, as many investors had been bracing for even more dismal
results. Citigroup's stock has fallen 18 percent since the beginning of
the year.</p><p>But Citigroup essentially lost in the first three
months of the year, $1.02 per share, what it made in the same period in
2007 _ $5 billion, or $1.01 per share. Analysts, on average, had
expected the New York bank to lose 95 cents per share, according to a
Thomson Financial survey.</p><p>With big exposure to mortgages and
leveraged loans, Citigroup remains at risk for further write-downs. The
credit ratings agency Moody's Investors Services on Friday changed its
ratings outlook on Citigroup to negative, citing write-downs that were
on the high side of its estimates.</p><p>In the first quarter, before
taxes, Citigroup took $6 billion in write-downs and credit costs on
exposure to subprime mortgages; $3.1 billion in write-downs on funded
and unfunded highly leveraged finance commitments; a downward credit
value adjustment of $1.5 billion related to exposure to bond insurers;
$1.5 billion in write-downs on auction-rate securities; and $3.1
billion in credit costs for consumers around the world.</p><p>Still, those write-downs were smaller than the $18.1 billion in write-downs it marked after the fourth quarter.</p><p>And
in another positive sign for investors, total revenue came to $13.2
billion _ about half what the bank pulled in during the first quarter
of 2007, but more than the average analyst forecast for $12.8 billion.
The bank's revenues were padded by its global consumer segment and its
global wealth management business.</p><p>The bank ousted CEO Chuck
Prince late last year and promoted Vikram Pandit, a former Morgan
Stanley investment banker, as it scrambles for cash.</p><p>In December
and January, Citi raised over $30 billion through sales of assets and
stock to outside investors, some of which have been funds run by Asian
and the Middle Eastern governments. It also has slashed costs and
reorganized the bank's various businesses.</p><p>"We are taking the
necessary steps to make Citi more efficient while fostering a culture
of accountability and teamwork," Pandit said in a statement. "As we
move into the second quarter and beyond, we will continue to divest
non-strategic assets and allocate capital to the products and regions
that will drive increased revenues, enhance the value of our franchise,
and ultimately, maximize shareholder value."</p><p>The Financial Times reported Friday that Pandit vowed to cut costs by 20 percent.</p>