Citigroup Inc. reported a net loss of US$2.8 billion for the third quarter, down from US$2.2 billion in earnings in the period last year.
The firm said its results include US$4.4 billion in net pre-tax write-downs in securities and banking, US$4.9 billion in net credit losses, and a US$3.9 billion net charge to increase loan loss reserves. The loss from continuing operations was US$3.4 billion, compared with US$2.1 billion in net income a year ago.
Revenues were US$16.7 billion, down 23%. The quarter’s decline in revenues was driven by the US$4.4 billion in write-downs, lower securitization results in North America Cards, and a US$612 million write-down related to the auction rates securities, partially offset by a US$347 million pre-tax gain on the sale of CitiStreet.
Total expenses declined for the third consecutive quarter, down US$1.2 billion since the second quarter. Headcount has been reduced by approximately 11,000 since the second quarter, and approximately 23,000 in the first nine months of 2008.
“While our third quarter results reflect both a difficult environment as well as continued write-downs on our legacy assets, we are making excellent progress on the parts of our business we control, including expense reduction, headcount, and balance sheet and capital management. We expect these improvements will enable us to realize the full earnings power of our franchise as the economy stabilizes,” said Vikram Pandit, chief executive officer of Citi.
Pandit also noted, “We have also been very focused on aggressively managing our risks during this credit cycle and have been taking steps to add hedges as appropriate. We end the quarter with a very strong Tier 1 ratio of 8.2% and a loan loss reserve of US$25 billion. Our capital will be further strengthened by the sale of our Germany retail banking operations in the fourth quarter, continued focus on reducing our legacy assets, as well as the latest steps taken by the U.S. Department of the Treasury.”
IE