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| Version 4 | Version 5 |
|---|---|
| Citigroup sees second giant loss | Citigroup sees second giant loss |
| (about 9 hours later) | |
| Citigroup has suffered a second massive loss and is cutting 9,000 jobs as the credit crisis continues to take its toll on the biggest US bank. | Citigroup has suffered a second massive loss and is cutting 9,000 jobs as the credit crisis continues to take its toll on the biggest US bank. |
| It made a loss of $5.11bn (£2.7bn) in the first quarter, although this was smaller than the $9.8bn loss reported in the final three months of 2007. | It made a loss of $5.11bn (£2.7bn) in the first quarter, although this was smaller than the $9.8bn loss reported in the final three months of 2007. |
| The results included about $12bn of write-downs for sub-prime mortgages and other risky assets. | The results included about $12bn of write-downs for sub-prime mortgages and other risky assets. |
| Lenders worldwide have written off more than $200bn hit by the credit crisis. | Lenders worldwide have written off more than $200bn hit by the credit crisis. |
| The job cuts are on top of 4,200 layoffs announced in January. | The job cuts are on top of 4,200 layoffs announced in January. |
| Citigroup employs about 369,000 employees worldwide, with 11,000 based in London. | Citigroup employs about 369,000 employees worldwide, with 11,000 based in London. |
| "Our financial results reflect the continuation of the unprecedented market and credit environment," said Citigroup chief executive Vikram Pandit. | "Our financial results reflect the continuation of the unprecedented market and credit environment," said Citigroup chief executive Vikram Pandit. |
| Only Switzerland's UBS has reported bigger write-downs and credit losses than Citigroup from the collapse of the sub-prime mortgage market. | Only Switzerland's UBS has reported bigger write-downs and credit losses than Citigroup from the collapse of the sub-prime mortgage market. |
| 'Cathartic quarter' | 'Cathartic quarter' |
| The loss was slightly deeper than many analysts had expected but European and US stock markets rose in relief there were no nasty surprises. | The loss was slightly deeper than many analysts had expected but European and US stock markets rose in relief there were no nasty surprises. |
| "It's a cathartic quarter," said Arthur Hogan, chief market analyst at Jefferies & Co in New York. | "It's a cathartic quarter," said Arthur Hogan, chief market analyst at Jefferies & Co in New York. |
| Citigroup shares climbed 4.5% in New York to finish at $25.11 - still about half what they were trading at last year. | |
| "The market is shrugging it off. We knew there were going to be write-offs and [Citigroup] hasn't yet said anything far too negative," said Andrea Williams, head of European equities at Royal London Asset Management. | "The market is shrugging it off. We knew there were going to be write-offs and [Citigroup] hasn't yet said anything far too negative," said Andrea Williams, head of European equities at Royal London Asset Management. |
| Earlier this week, Citigroup rival Merrill Lynch said it lost $1.96bn in the first quarter of 2008 and unveiled plans to cut about 4,000 jobs worldwide. | Earlier this week, Citigroup rival Merrill Lynch said it lost $1.96bn in the first quarter of 2008 and unveiled plans to cut about 4,000 jobs worldwide. |
| Merrill's results included about $4.5bn of sub-prime related write-downs. | Merrill's results included about $4.5bn of sub-prime related write-downs. |
| Revenue halves | Revenue halves |
| Citigroup's revenues plunged 48% to $13.2bn as the firm wrote-down the value of assets linked to sub-prime mortgages - those given to people with poor or patchy credit histories. | Citigroup's revenues plunged 48% to $13.2bn as the firm wrote-down the value of assets linked to sub-prime mortgages - those given to people with poor or patchy credit histories. |
| Of the write-downs, $6bn was directly related to the sub-prime market, with the remainder due to other assets and exposure affected by the credit crisis. | Of the write-downs, $6bn was directly related to the sub-prime market, with the remainder due to other assets and exposure affected by the credit crisis. |
| It also saw a $3.1bn increase in consumer credit costs due as people failed to keep up with payments on mortgages, unsecured personal loans, credit cards and auto loans. | It also saw a $3.1bn increase in consumer credit costs due as people failed to keep up with payments on mortgages, unsecured personal loans, credit cards and auto loans. |
| Last year, investments and assets based on sub-prime loans quickly soured as higher interest rates pushed up mortgage payments and triggered a wave of defaults. | Last year, investments and assets based on sub-prime loans quickly soured as higher interest rates pushed up mortgage payments and triggered a wave of defaults. |
| Banks became more reluctant to lend to each other as the scale of bad debts remained unknown, leading to a shortage of credit worldwide. | Banks became more reluctant to lend to each other as the scale of bad debts remained unknown, leading to a shortage of credit worldwide. |
| The credit crunch resulted in the collapse of US banking giant Bear Stearns and is being felt in the wider economy as consumers pare back debt-fuelled spending and grapple with higher mortgage payments. | The credit crunch resulted in the collapse of US banking giant Bear Stearns and is being felt in the wider economy as consumers pare back debt-fuelled spending and grapple with higher mortgage payments. |