Fitch Ratings today said that its outlook on Citigroup remains negative after the announcement of its latest writedowns, a quarterly loss, and actions to boost capital.

The outlook will remain negative until profitability is restored, exposure to topical areas is further reduced, and asset quality stabilizes, according to Fitch Ratings.

Overall, Citi’s financial issues remain manageable in Fitch’s opinion. Citi’s ratings also continue to be supported by its enormous and diversified franchise, as well as its improved capital base, the rating agency explained.

In early November, Fitch downgraded Citi and initiated a negative rating outlook following the bank’s announcement of massive charges for subprime-related CDOs. Since that time, Citi has raised sizable Tier I capital, more than offsetting the capital impact of its CDO charges.

Aggressive capital raising efforts have alleviated pressure on Citi’s ratings, Fitch said. In fact, capital raising efforts went well beyond Fitch’s expectations at the time of the downgrade, while actual CDO charges were generally in line with Fitch’s expectations, it added.

“Given the composition of Citi’s exposures by type and vintage, its charges appear to be at least as conservative as those taken by other major U.S. financial institutions. Nevertheless, further market erosion could naturally result in additional charges,” it says. “Ultimately, Fitch believes that some of the recognized losses may eventually be recovered as current mark-to-market charges reflect very dire assumptions about default probabilities and loss severity for U.S.-based mortgages.”