Citi Reports $5 Billion First Quarter Loss, 9,000 Layoffs

April 18, 2008 No Comments »

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Citigroup today reported a net loss of $5.1 billion, or $1.02 per share, for the first quarter of 2008, compared to net income of $5 billion a year ago, and said it would slash an additional 9,000 jobs to cut costs.

The results include $6 billion in write-downs tied to subprime related exposures and another $6 billion in other write-downs and market value adjustments on stuff like Alt-A mortgages and commercial real estate positions.

Total revenue was $13.2 billion, a decrease of 48 percent, largely related to the hefty write-downs associated with the bank’s subprime holdings.

In the company’s U.S. consumer segment, higher delinquencies tied to first and second mortgages led to an increase in net credit losses of $1.1 billion and a $1.2 billion increase in loan loss reserves.

Fourth quarter loan originations increased to $34.3 billion from $29.5 billion in the third quarter, but were off from year-ago levels of $39.6 billion.

Delinquencies in the company’s real estate lending division climbed more than 15 percent from the fourth quarter to 2.73 percent, and were nearly triple the 1.13 percent rate a year ago.

In early March, Citi said it planned to reduce its residential mortgage assets by a whopping $45 billion within the year while cutting the amount of new loans to be held in its portfolio by more than 50 percent.

The mortgage division has also stamped out loans on 3-4 unit investment properties, eliminated short-term adjustable-rate mortgages, and ditched home equity loans for borrowers with poor credit.

Shares of Citi were up $1.80, or 7.49%, to $25.83 in afternoon trading on Wall Street.

(photo: luciuskwok)

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