Mumbai: Bank results season in the US continued with the largest of them – Citigroup Inc. – declaring its quarterly results on Friday. This was the US bank's second consecutive quarterly loss, pummeled by more than $15 billion in write-downs and increased reserves for credit losses. Citi's results follow similar showings by other major US banks. (See: Merrill Lynch posts deep quarterly loss; to cut 10 per cent of workforce)  

Citi declared quarterly losses of $5.11 billion, or $1.02 per share, compared with a profit of $5.01 billion, or $1.01 per share, a year earlier. Revenue fell 48 per cent to $13.22 billion from the corresponding quarter in 2007.

This was slightly above analysts' estimates of around $11 billion, and, as a result, Citigroup shares went up by $1.43, or 6 per cent, to $25.46 in pre-market trading. It is still a far cry from the 52-week high of $55.53 scaled in May last year. The stock has lost more than half its value since then, a fact that prompted then CEO Charles Prince to step down.

Citi now plans to cut 9,000 jobs, as chief executive Vikram Pandit had vowed to make savage cuts in the bank's operations to streamline the bank's operations. Citi, which already cut 4,200 jobs in January, is now looking to slash its cost base further by as much as a fifth.

In a statement, Pandit said the results ''reflect the continuation of the unprecedented market and credit environment and its impact on our historical risk positions.'' Citi employs around 370,000 people worldwide, including about 11,000 in the UK.

Thousands of banking jobs are being axed as the investment banking industry struggles to cope with the deepening financial crisis.

Another Wall Street major Merrill Lynch said yesterday it was cutting 4,000 jobs – a tenth of its workforce - after writing off billions of dollars in liabilities.

Collectively, Citi has now lost $39 billion due to write-downs and credit losses from the collapse of the sub-prime mortgage market, more than Zurich-based UBS AG and Merrill Lynch & Co. Since his appointment after Prince's exit, current CEO Vikram Pandit has bailed out about 10 investment funds, replaced his chief risk officer, raised $30 billion to replenish capital and cut more than 6,000 jobs in an effort to turn things around.

Other steps taken by him since his appointment include the selection of his former Morgan Stanley colleague John Havens to be in charge of Citigroup's trading and investment banking, transfer of US consumer head Steve Freiberg to a new credit-card division, and the recruitment of former Wells Fargo & Co. executive Terri Dial to oversee consumer banking in the US.

Breaking up the figures for this quarter, the results included $6 billion of write-downs and credit costs on sub-prime mortgages and bonds, $1.5 billion on leveraged buyout loans and $1.5 billion on auction-rate securities. These included $3.1 billion in write-downs for loans to fund corporate buyouts, and a $3.1 billion increase in credit costs related to consumer lending.

The bank cited increased delinquencies on mortgages, unsecured personal loans, credit cards and auto loans, amid "trends in the U.S. macroeconomic environment, including the housing market downturn and rising unemployment." Pandit said that the "results reflect the continuation of the unprecedented market and credit environment and its impact on our historical risk positions."

However, the bank has sufficient funds to tide over the current crisis, with some estimates of a capital cushion in excess of $17 billion more than what was needed to offset write-downs recorded last year. Also, Citigroup has been quite aggressive in raising funds and already has sold stakes to investment funds controlled by the governments of Abu Dhabi, Kuwait and Singapore. This has netted it close to $30 billion in recent times.