Citigroup slips to another loss and flags big jobcuts

The bank made a loss of $5.1 billion in the first three months of the year, less than the $10 billion deficit in the final quarter of last year. But in the same quarter in 2007 it made profits of $5 billion.

Without putting any numbers on it, new chief executive Vikram Pandit seemed to confirm fears of major job losses. He said: "We are taking the necessary steps to make Citi more efficient while fostering a culture of accountability and teamwork."

Analysts have suggested that Citi could cut as many as 2000 of the 12,000 people it employs in London, which is headquarters for all its European, Middle East and Africa operations.

The London-based operations alone made losses of just over $1 billion in the first quarter after $1.9 billion of writedowns.

Pandit said: "Our financial results reflect the continuation of the unprecedented market and credit environment and its impact on our historical risk positions. During the first quarter, valuations of our subprime-related exposures in fixed-income markets and leveraged finance assets have further declined and credit costs in our consumer lending businesses have increased."

Citi said writedowns and credit costs on subprime-related direct exposure amounted to $6 billion. Another $3.1 billion came from funded and unfunded highly leveraged commitments.

Investments and exposure to so-called monoline insurers cost $1.5 billion and another $1.5 billion went on auction securities.

Finally the group upped its provisions for consumer-credit losses by $3.1 billion. But Citi shares moved ahead in early trading in New York with analysts saying that, like Merrill Lynch and JPMorgan earlier in the week, the bank appeared to have cleared its decks in the last quarter. They also said first-quarter revenues, if not profits, were higher than expected.