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Citigroup Loss Widens on Writedowns
16th Oct 2008
Dow component Citigroup's loss nearly matched market expectations, coming in at 71 cents a share in the third quarter, on big writedowns.
The results included $4.4 billion in net pre-tax write-downs in securities and banking, Citigroup said in a statement.
The net loss totaled $2.8 billion, or 60 cents per share, compared with a profit of $2.2 billion, or 44 cents, a year earlier.
Revenue was $16.7 billion, down 23 percent from a year ago. Analysts were looking for $19.62 billion.
The company reported writedowns of $2.0 billion on structured investment vehicle assets and writedowns of $1.2 billion, net of hedges, on alt-A, or mid-risk, mortgages.
Approximately 11,000 jobs were cut since the second quarter, the bank said in a statement.
Citigroup shares were down 4.2 percent in Frankfurt.
"I always said there will be two types of banks: those that survive and grab market share, and those that struggle. Citigroup is trying to position itself as being in the strong camp," Matt Mccormick, portfolio manager and banking analyst, Bahl & Gaynor Investment Counsel, told Reuters.
"But that doesn't make their job any easier. They have significant economic headwinds, and they have continued exposure to illiquid securities," Mccormic added.
-- Reuters contributed to this story
16th Oct 2008
Dow component Citigroup's loss nearly matched market expectations, coming in at 71 cents a share in the third quarter, on big writedowns.
The results included $4.4 billion in net pre-tax write-downs in securities and banking, Citigroup said in a statement.
The net loss totaled $2.8 billion, or 60 cents per share, compared with a profit of $2.2 billion, or 44 cents, a year earlier.
Revenue was $16.7 billion, down 23 percent from a year ago. Analysts were looking for $19.62 billion.
The company reported writedowns of $2.0 billion on structured investment vehicle assets and writedowns of $1.2 billion, net of hedges, on alt-A, or mid-risk, mortgages.
Approximately 11,000 jobs were cut since the second quarter, the bank said in a statement.
Citigroup shares were down 4.2 percent in Frankfurt.
"I always said there will be two types of banks: those that survive and grab market share, and those that struggle. Citigroup is trying to position itself as being in the strong camp," Matt Mccormick, portfolio manager and banking analyst, Bahl & Gaynor Investment Counsel, told Reuters.
"But that doesn't make their job any easier. They have significant economic headwinds, and they have continued exposure to illiquid securities," Mccormic added.
-- Reuters contributed to this story
