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| Citigroup to split as losses grow | |
| (20 minutes later) | |
| Struggling US banking giant Citigroup has announced plans to split the firm in two, as it reported a quarterly loss of $8.29bn (£5.6bn). | Struggling US banking giant Citigroup has announced plans to split the firm in two, as it reported a quarterly loss of $8.29bn (£5.6bn). |
| It said it would realign into two new firms, Citicorp and Citi Holdings. | It said it would realign into two new firms, Citicorp and Citi Holdings. |
| Citicorp will handle the company's traditional banking work, while Citi Holdings will take on the firm's riskiest investment assets. | Citicorp will handle the company's traditional banking work, while Citi Holdings will take on the firm's riskiest investment assets. |
| Last autumn, Citigroup had to be rescued by the US government in a bail-out deal totalling $45bn. | Last autumn, Citigroup had to be rescued by the US government in a bail-out deal totalling $45bn. |
| The government also agreed to guarantee up to $306bn (£205bn) of risky loans and securities on Citigroup's books. | The government also agreed to guarantee up to $306bn (£205bn) of risky loans and securities on Citigroup's books. |
| 'Ongoing efforts' | 'Ongoing efforts' |
| "Given the economic and market environment, we have decided to accelerate the implementation of our strategy to focus on our core businesses," said Citigroup chief executive Vikram Pandit. | "Given the economic and market environment, we have decided to accelerate the implementation of our strategy to focus on our core businesses," said Citigroup chief executive Vikram Pandit. |
| I'm surprised it's this bad Matt McCormick, Bahl & Gaynor Investment Counsel | |
| "This will help in our ongoing efforts to reduce our balance sheet and simplify our organisation. | "This will help in our ongoing efforts to reduce our balance sheet and simplify our organisation. |
| "We are setting out a clear roadmap to restore profitability." | "We are setting out a clear roadmap to restore profitability." |
| Citigroup's net loss for the last three months of 2008 works out at $1.72 per share, worse than analyst expectations of $1.31. | Citigroup's net loss for the last three months of 2008 works out at $1.72 per share, worse than analyst expectations of $1.31. |
| Its quarterly revenues were down 13% to $5.6bn, which Citigroup said reflected "the impact of a difficult economic environment and weak capital markets". | Its quarterly revenues were down 13% to $5.6bn, which Citigroup said reflected "the impact of a difficult economic environment and weak capital markets". |
| "I think people knew it was going to be bad, but I'm surprised it's this bad," said Matt McCormick, portfolio manager at Bahl & Gaynor Investment Counsel in Cincinnati. | "I think people knew it was going to be bad, but I'm surprised it's this bad," said Matt McCormick, portfolio manager at Bahl & Gaynor Investment Counsel in Cincinnati. |
| Redundancies | Redundancies |
| For 2008 as a whole, the bank made a net loss of $18.72bn. | For 2008 as a whole, the bank made a net loss of $18.72bn. |
| CITIGROUP SPLIT Citicorp - to have responsibility for universal banking operationsCiti Holdings - to take on the firm's brokerage and investment interests, and a special pool of loss-making assets | |
| It blamed the losses on having to write-off bad debt and the cost of making redundancies. | It blamed the losses on having to write-off bad debt and the cost of making redundancies. |
| The firm cut 52,000 jobs last year as its losses mounted against the backdrop of the sharp downturn in the US mortgage market and the resulting global credit crunch. | The firm cut 52,000 jobs last year as its losses mounted against the backdrop of the sharp downturn in the US mortgage market and the resulting global credit crunch. |
| "We are committed to helping the financial markets recover as quickly as possible," added Mr Pandit. | "We are committed to helping the financial markets recover as quickly as possible," added Mr Pandit. |
| The firm added that it also expected further departures from its board of directors. | |
| It was announced last week that director Robert Rubin, a former US Treasury Secretary is to leave the firm. |