Citigroup Posts New Losses, Cuts Workforce

However, $2.5B Shortfall Less Than Expected For Largest U.S. Bank

(CBS/ AP)  Citigroup posted another loss and laid off 6,000 employees in the second quarter as it struggled with surging loan defaults, but the $2.5 billion shortfall was smaller than Wall Street anticipated.

The biggest U.S. banking company by assets said Friday that it lost the equivalent of 54 cents per share in the April-June period. In the same timeframe last year, the bank earned $6.23 billion, or $1.24 per share.

Analysts surveyed by Thomson Financial had predicted a larger loss of 66 cents share.

Citigroup Inc.'s securities and banking division wrote down the value of its assets by $7.2 billion, before taxes, and an asset revaluation cost its consumer lending business $745 million. Those write-downs totaling about $8 billion are significantly lower than write-downs taken in the first quarter and in last year's fourth quarter.

However, credit costs jumped to $7.2 billion as more consumers defaulted on their loans - implying that while losses in the credit markets are decelerating, losses from actual defaults in Citigroup's mortgages, home-equity loans, auto loans and credit card lines are mounting.

The $7.2 billion in credit costs included $4.4 billion in credit losses and a $2.5 billion charge to bulk up reserves for future loan losses.

Credit.com's John Ulzheimer told CBS News correspondent Anthony Mason that lenders are moving quickly to cut their losses.

"What the credit card issuers have done for the past six months is really draw a line in the sand and say, 'No more, we're gonna make a massive flight to quality," Ulzheimer said.

So banks are lowering credit limits on those clients with poor payment records, raising minimum payments for many borrowers and closing inactive accounts - all to reduce their risk, Mason reports.

Citigroup has failed to turn a profit for three straight quarters, losing a cumulative $17.4 billion during that period after writing down its assets by about $46 billion. Its shares have tumbled 65 percent over the past year, and recently hit their lowest point since the day Citicorp and Travelers combined in October 1998.

But after better-than-expected results from two other big consumer banks this week - JPMorgan Chase & Co. and Wells Fargo & Co. - the market appears to be deciding that the prospect for the ailing financial sector may not be as dire as they feared.

Citigroup's results were helped by asset sales, lowered expenses, and record revenues in transaction services, interest rate and currency trading and commodities.

The bank has raised about $40 billion over the past several months by shedding businesses, lowering its dividend, and selling stock.

And during the second quarter, Citi lopped off $99 billion from its total assets, which now stand at $2.02 trillion. Back in May, Chief Executive Vikram Pandit said the bank would shrink its then-$2.2 trillion in balance sheet assets by about $400 billion to $500 billion over the next few years.

"While there is still much to do, we are encouraged by our progress in delivering on our commitment to the re-engineering efforts," Pandit said in a statement.

Not all financial services companies have been clearing the low bar that Wall Street set for them this quarter.

The brokerage Merrill Lynch & Co. late Thursday reported a wider-than-expected quarterly loss and write-downs from losing investments in the debt markets approaching $40 billion. The credit lender Capital One Financial Corp., meanwhile, posted a larger-than-expected profit decline.

[nssherlock1]

I''m not laughing! No really, I am NOT laughing at these losers. (snicker)

[johnpatrick9]

Is this a great country or what...???? People don''t matter money and power do..."Let''s Roll!"
Our Leaders know what they are doing since we don''t have a clue.

[harpoot]

Management messes up and they sack the underlings. What''s wrong with this picture?????

[harpoot]

Management messes up and they sack the underlings. What''s wrong with this picture?????

[harpoot]

Management messes up and they sack the underlings. What''s wrong with this picture?????

[harpoot]

Management messes up and they sack the underlings. What''s wrong with this picture?????

[harpoot]

Management messes up and they sack the underlings. What''s wrong with this picture?????

[harpoot]

Management messes up and they sack the underlings. What''s wrong with this picture?????

[edward1975-2009]

Keep backing bad loans and mortgages and the Feds will bail ya out. Only in America, can a business run itself in the ground and have the government bail them out. Wish they would do that for the average American struggling to make ends meet, with the fallout from all these bad decisions.

[jericho1337]

I''ve consulted for a handful of top-20 FIs in the US and can safely say that Citi was the worst of the bunch. Pandit''s making some of the right decisions but Prince destroyed any integrity Citi had remaining and frankly, it''s too little, too late (and WHY would Citi hire a CEO with no consumer banking experience???).

- If you treat your customers poorly; and
- Encourage poor lending practices (greed!); and
- Outsource much of your IT to India...

you *should* lose money!

[neobrian-2009]

Expect Me To Cry For THEM ???
Ha Ha Ha Ha !!!!Don`t Cry Over " Criminal Oil "

[stn_sage]

You absolutely know it''s time to replace your political leaders, and hope that CEOs get sacked, when the best they can do is brag that they only lost $2.5 billion dollars or violate the U.S.Constitution stating, ''it''s only a G.D. piece of paper''!

If God doesn''t want to help us, we sure better help ourselves by voting these creeps out of office!

[jntlw-2009]

Layoffs - the only known remedy by those brillinat CEOs of cutting costs - it would never occur to them to cut their pay - of course not. That is too drastic. Always the worker who gets the shaft for doing the daily work and applying the policies of management as directed but the first to go as victims of this mismanagment. When will it end?

[whitemale08]

Here''s a question for you Republicans:

What''s the difference between corporatism and socialism?

I''ll tell you; corporatism is socialism for the rich and socialism is socialism for the working class.

It''s unfair that the rich get to privatize their profits on the backs of working people and socialize their losses.

I smell a revolution folks, and I don''t care what excuses you make for Mitt Romney and his hedge fund ilk but things have got to change.

And the working people are shrinking in size because they can''t afford to raise a family while the welfare rolls expand because at least the state cares for them.

So who''s the socialist? Republicans are for their corporatist hedge fund mentatlity.

[hasher47]

Yay!!! Another great Republican Economic Day!!!
I''m assuming they''re all cheering based on Repub posts on the other threads. Everything is fine in RepubLand. The gas prices are great, deficits no problem, wars going good, educations fine, jobs being outsouced no problem, food prices fine, border security solid, everything is just great in RepubLand.

That''s why they want to keep a Republican in office.

[drinuk]

Easy Option, sack the workforce. Best Option, shoot the executive and the politicians who get into bed with them.

[timdgrim]

Easy Option, sack the workforce. Best Option, shoot the executive and the politicians who get into bed with them.


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Posted by drinuk at 02:17 PM

I''ll vote for YOU!

[kevboom]

How can a company that charges upwards of 29% interest on credit cards lose money for three straight quarters? I''m guessing greed and mismanagement at the top. As usual, the 6000 peon employees pay the price.

[aldon61]

I worked with Citicorp before they became Citigroup. It was a great company during the 70''s and most of the 80''s. In an effort to compete globally, centralization became a buzz word. By the time 1988 came around, Citicorp Mortgage ( my division) had reduced their feild support by close to 80 per cent. The old managment respected experience. Under Walter Wriston and John Reed, there was a strong commitment to their personnel. That unfortunatly, is no longer the case. I still have friends that work for the company; most work from their houses and don''t have the liberty they once had. The new management wants MBA''s and give very little attention to experience; these "theorist" employees don''t have real live field experience and are making loads of mistakes. This is where Citigroup is taking their hits. They need to look at "line experience" when hiring new employees, otherwise the bleeding is not going to stop anytime soon.

[anniegirl50]

If you Demoroids new what you were talking about you would realize that it was the Democratic era of Bill Clinton that set in motion the Free Trade issue that has cost this country jobs and money. Remember Ross Perot. He said we would all hear a giant sucking sound when all our jobs were sucked right out of the United States. Well hell, it was you demoroids that voted Bill Clinton into office. Sure as heck was not me. So the only people to blame for what has happened is the democrats who started this ball rolling. Look in your own back yard..........

[anniegirl50]

Another comment on the economy. If you cannot afford to make a mortgage payment, don''t get a home loan! DUH!! If you are to stupid to understand what an ARM loan is, find somebody smarter than you and ask them how that works. Here is a concept. Stop living above your means. If you don''t earn enough money to pay your debt, get a second job, or don''t purchase things you cannot pay for....what a concept!! Now all the so called "Rich People" are going to have to bail out a bunch of idiots. So if a mortgage company is stupid enough to make a loan to a non credit worthy person, well then they need to suffer the loss. Not the taxpayers of this county. And if you cannot afford to pay your mortgage, you should have thought ahead before you signed the documents. Home ownership costs rise with maintenance costs, insurance costs, taxes, etc. Did you think your payment was going to remain the same for the life of your loan?????? I say we pass a law to not make loans to idiots. So, instead of putting the blame where it truely belongs............you demoroids just blame it on the current administration. Just remember, the Congress is Majority Demoroid. Have they passed any new laws to help you out at the expense of the RICH PEOPLE????

[morganbarber]

Lets make the 6000 bottom feeders suffer for the stubbornness and stupidity of the big fish at the top.

[aldon61]

Well hell, it was you demoroids that voted Bill Clinton into office. Sure as heck was not me. So the only people to blame for what has happened is the democrats who started this ball rolling. Look in your own back yard..........


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Posted by anniegirl50 at 03:06 PM : Jul 18, 2008

All approved by a Republican congress, lest we forget!

[aldon61]

Home ownership costs rise with maintenance costs, insurance costs, taxes, etc. Did you think your payment was going to remain the same for the life of your loan?????? I say we pass a law to not make loans to idiots. So, instead of putting the blame where it truely belongs............you demoroids just blame it on the current administration. Just remember, the Congress is Majority Demoroid. Have they passed any new laws to help you out at the expense of the RICH PEOPLE????


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Posted by anniegirl50 at 03:21 PM : Jul 18, 2008

Actually, creative financing, such as ARM''s and REM''s began under the Reagan administration, but we did have a democratic congress, the reverse of my previous counter to your ravings. If you can''t figure it out Annie, all pol''s are crooked and liars, not just dems. Neither party has exclusivity on deceiving the american people. Stop blaming the dems alone, otherwise you''ll show yourself to be a nut case.

[hasher47]

... you demoroids that voted Bill Clinton into office.
Posted by anniegirl50 at 03:06 PM : Jul 18, 2008
------------------
Is that the same Bill Clinton that left BUSH a balanced budget and a SURPLUS?
What a sleezebag!!!

[hutchinstepp]

We have to pull together as a country and as people. No Democrats No Republicans. Only Citizens. Its got to stop or we will be a 3rd world country.

[sistatee-2009]

Citibank is controlled by the Rockefeller family, as is President Bush and the U.S. government. With the possible exception of a few Yale Bonesmen, David Rockefeller has ruined his own bank and the government, almost single-handedly. No doubt, he''ll contact George and demand a bailout for the bank.

[antoniof123]

Hey America another bail out thank a Republican for this one too.

[iphyt4u]

Bush''s republican welfare, tax breaks for oil companies, and endless supplies of money for banks. It took 5 days to provide water to hurricane Katrina victims. It took less than 5 minutes to electronically transfer funds to banks. Worst president ever.

[gracchus1]

All of you are just about hitting the nail on the head. It is rather simple: rich people controlling poor people. The Congress is bought and paid for by the rich. So, the Congress responds to and does what rich people tell it to do, just like a Pavlovian dog. Is it any accident that the top 1% of the rich people in this country are worth a combined $16.8 trillion? That is more than 90% of everyone else. HUTCHINSTEPP has it right. It is time to vote third party from local politicians all the way up to the White House. Many people say third party candidates never win. If we all vote for third party candidates, guess what, they just might win. It is not so much the people as it is THE SYSTEM that needs changing.

[anniegirl50]

It took 5 days to provide water to hurricane Katrina victims. It took less than 5 minutes to electronically transfer funds to banks. Worst president ever.


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Posted by iphyt4u at 04:49 PM : Jul 18, 2008
+ report abuse


That Katrina mess is the result of the failure of the Mayor of New Orleans and the Governor of Louisiana.
The President of the United States is not a First Responder. Point - look at the recent flooding in IOWA. The very capable Mayors and the Governor of that state took care of their people. Nobody crying in Iowa blaming the Admin for a natural disaster that the Mayor and Governor failed to respond to properly. Mayor, Governor....first responders.......

[wardoglrs]

Americans can blame Repubs but that is just pointing fingers cause the dems are in control of congress and what have they done? NOTHING.. See there all the same and you all keep playing in there game of point and blame when in fact its the same people in office that play Americans like a fish on the line.
they know what there doing and you all keep falling for the same ole *** on and on and on...
Grow up vote 3rd party and show them who''s boss.

[oneworldusa]

How come the hard-working legal citizens of America keep getting screwed over and their livlihoods threatened by doing the exactly what the people making the bad decisions are asking them to do?

Need another CEO announcement here like Wachovia and WaMu.

[oneworldusa]

Posted by HUTCHINSTEPP at 04:18 PM : Jul 18, 2008

I agree. It would be nice to have a party for and by the people without agendas.

[anniegirl50]

Here is a good reason to not elect a democrat in 2008

BILL CLINTON was elected in 1992 on a platform of "putting people first." His campaign promised health care reform, gay rights legislation and an end to Republican threats to abortion rights, among many other things. Yet over the next eight years, Clinton left behind a trail of broken promises on all these issues.

With the Bush administration on the rampage at home and abroad, many people have forgotten this. They look back to the Clinton years as a time when the right wing didn''t dominate U.S. politics and working people''s living standards got significantly better. Actually, these impressions are false. Whether you look at class inequality, or government programs for the poor, or the rights of women and minorities, or military intervention abroad, the generalized ruling-class offensive in the U.S. didn''t begin in January 2001, but stretches back through the Clinton years and beyond.


After all, the same arguments were made in favor of voting for Clinton in 1992--that we couldn''t afford four more years of Republican attacks from a White House run by George Bush Sr. Remembering the real record of the Clinton administration means remembering that Clinton betrayed almost every hope for a substantial change from what came before him.

[g-gfather]

As the American tax payer is sold into bondage by the bail out of corrupt corporations by the traitorous politicians their money can buy,the stock markets rally in celebration of their plunder.
Our childern,our grand-childern our great-grand-childern will have NO AMERICA !!!STOP THE CARNAGE NOW
--IMPEACH-CIVIL DISOBEDIENS-REVOLT..THE FUTURE OF OUR
AMERICA IS AT STAKE. For the childern. Great-grandfather

[jw218389]

The BIGGEST ARAB FINANCE COMPANY lays off American Workers.... SHOCKING!!!!

The BushLadens are destroying the middle class-what''s left of it....

[anniegirl50]

Well it appears that their agenda is to drive our economy in the ground. No loss to them with oil prices as high as they are. Once they have finished destroying the US financially, they move in and ISLAM takes over. hahahaha

With the purchase of a 4.9 percent stake, Abu Dhabi, the largest emirate in the United Arab Emirates and its capital, would rank as Citigroup''s largest shareholder ahead of Los Angeles-based Capital Group Cos. and Saudi billionaire Prince Alwaleed bin Talal, data compiled by Bloomberg show.


Of course, the fact that they are buying in tells us the UAE has confidence in CitiGroup''s future. Additionally, it tells us they have confidence in the future of American markets.

On the other hand, now Saudi Arabia and UAE are two of the three largest holders in CitiGroup and one has to wonder what agenda they will assert on the Board of Directors.

[vnveteran72]

All of you are just about hitting the nail on the head. It is rather simple: rich people controlling poor people. The Congress is bought and paid for by the rich. So, the Congress responds to and does what rich people tell it to do, just like a Pavlovian dog. Is it any accident that the top 1% of the rich people in this country are worth a combined $16.8 trillion? That is more than 90% of everyone else. HUTCHINSTEPP has it right. It is time to vote third party from local politicians all the way up to the White House. Many people say third party candidates never win. If we all vote for third party candidates, guess what, they just might win. It is not so much the people as it is THE SYSTEM that needs changing.


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Posted by gracchus1 at 05:05 PM : Jul 18, 2008
+ report abuse

If the people voted out ALL incumbents, and replaced them with NON-Million/Billionaire, regular citizens, which would serve a max of 2 terms, and eliminate lobbyists and the corruption they bring, we may have a chance of restoring our Constitution and Individual Freedom and Liberty. Without such a scenario, our Once Great Nation is doomed. The Wealthy Ruling Elite will continue to construct their system of Lords and Surfs, Landowners and Slaves. It''s time for a Revolution like our Founding Fathers had against a similar "Royalty".
Hang them from Trees from Coast to Coast.
(After a Fair Trial of course)

[iphyt4u]

If any of you people believe anything that the Bush administration is telling you, or the banks, and the Fed are telling you, your just plain naive and stupid. If this is the best the Republicans can do, I would suggest voting straight ticket Democrat in the fall. Worst President in the history of this Great Nation.

[iphyt4u]

If any of you people believe anything that the Bush administration is telling you, or the banks, and the Fed are telling you, your just plain naive and stupid. If this is the best the Republicans can do, I would suggest voting straight ticket Democrat in the fall. Worst President in the history of this Great Nation.

[nskduke2]

How about we vote for the right people this fall, democrat,republican,independent.

[whiskyrocker]

The economy is just in a "slow down" Keep telling yourself that.

[flagship-usa]

iphyt4u at 09:13 PM : "...history of this Great Nation."
America is still a British Colony: in function and form...a mirror image of England.

[wardoglrs]

"There is only one way that leads to an improvement of the standard of living for the wage-earning masses, viz., the increase in the amount of capital invested. All other methods, however popular they may be, are not only futile, but are actually detrimental to the well-being of those they allegedly want to benefit. %u2026 Public opinion believes that the improvement in the conditions of the wage earners is an achievement of the unions and of various legislative measures. %u2026 As long as these fallacies prevail upon the minds of the voters, it is vain to expect a resolute departure from the policies that are mistakenly called progressive."