Citi loses $7.6 bn in Q4 on bailout repayment costs

NEW YORK: Citigroup, the US bank that is 27% owned by the Treasury Department, ended a three-quarter profit streak with a $7.6-billion loss on costs to exit the government’s bailout programme.

The fourth-quarter loss of 33 cents a share was narrower than the record loss of $17.3 b, or $3.40 a share, a year earlier, New York-based Citi said on Tuesday in a statement. The company was expected to lose 30 cents a share, the average estimate of 18 analysts surveyed by Bloomberg.

Chief executive officer Vikram Pandit had to book an $8-b pre-tax charge when he repaid $20 billion of bailout funds in December to avoid being left behind by rival banks that exited the Troubled Asset Relief Programme. Taxpayers still own 7.7 billion Citi shares, and Pandit failed to restore the bank to profitability in his second full year in the top job. “We have made enormous progress in 2009,” Pandit said in the statement. “It was our responsibility to get our own house in order.”

Citi’s Q4 loss contrasts with results at JPMorgan Chase & Co, where profit more than quadrupled from a year earlier to $3.28 b as investment-banking fees climbed. Citi’s revenue fell 4.3% to $5.41 b in the fourth quarter. The bank’s Tier 1 common ratio was 9.6%, up from 2.3% a year earlier.

After two years in the top job, Pandit’s “honeymoon is over”, Saudi investor Prince Alwaleed bin Talal said last week in a TV interview. “It’s time to deliver,” Alwaleed said.

Pandit probably needs to increase Citi’s share price to at least $5 to keep his job beyond another year said William Fitzpatrick, a financial-industry analyst with Optique Capital Management in WisconsinThe stock closed at $3.42 on January 15. “I do think he’s on the hot seat,” Fitzpatrick said. “He just has to get back to divesting assets, trying to clean up the company as best he can.”