US bank Citigroup posted a $5.11 billion quarterly loss today and said it will cut another 9,000 jobs after suffering billions of dollars of write-downs tied to mortgages, other debt and a slumping economy.
The loss was larger than expected and reflected more than $16 billion of write-downs and credit-related costs at the largest US bank.
Investors nevertheless took comfort that the bank and its new chief executive, Vikram Pandit, are taking steps to get past credit problems, drive down expenses, and restore luster to a stock down by about half over the last year.
Citigroup shares traded up $1.78, or 7.4 per cent, at $25.81 in afternoon trading on the New York Stock Exchange. Results helped spark a broad stock market rally, with the Standard & Poor's 500 index up 2.1 per cent.
Citigroup's net loss totaled $1.02 per share, and compared with a year-earlier profit of $5.01 billion, or $1.01 per share. Revenue fell 48 per cent to $13.22 billion.
Citigroup has announced 13,200 job cuts in 2008, including 4,200 disclosed in January. It said about 1,300 people in its investment banking unit lost jobs in the first quarter.
The bank said the 9,000 additional cuts will take place in the next year, including about 7,000 in consumer banking. Citigroup said it ended March with about 369,000 employees.
Mr Pandit is trying to focus on stronger businesses and slash exposure to risky assets after years of poor expense and risk management left New York-based Citigroup bearing the full brunt of the global credit market crisis.
Expenses fell 2 per cent from the fourth quarter. In the last two weeks, Citigroup said it would sell its Diners Club International credit card network and most of its North American commercial lending and leasing business.
Citigroup said it also incurred $3.1 billion of credit costs related to consumer lending.
The results came a day after Merrill Lynch & Co said it took more than $6.5 billion in write-downs. Since the credit crisis began last summer, financial companies orldwide have suffered more than $230 billion of write-downs and credit-related losses.