Citi posts $10B Q4 loss, $18.1B write-down, cuts jobs
NEW YORK -- Shaken by the erosion of its capital base, Citi struck a deal for a $12.5 billion cash infusion from the sovereign investment funds of Singapore, Kuwait, the state of New Jersey, and two men who are already heavily invested in the success of the bank: Saudi Prince Alwaleed bin Talal, who owns about 4% of Citi stock, and former Citigroup CEO Sandy Weill, architect of the bank's "financial supermarket" growth strategy.
The bank also said it plans to sell $2 billion worth of new shares to the public and cut its dividend from 54 cents a share to 32 cents. The fundraising moves come just weeks after Citi announced a $7.5 billion cash infusion from the government investment fund of Abu Dhabi.
In afternoon trading on the New York Stock Exchange, Citigroup's stock was down almost 7%.
Vikram Pandit, who took over as CEO of the bank a month ago, described the losses as "unacceptable" and told analysts in a conference call that "we need to do better and we will do better."
In October, Citigroup announced that losses in the bank's subprime mortgage portfolio could be as large as $8 billion to $11 billion. In an ominous note for investors, chief financial officer Gary Crittenden acknowledged Tuesday that problems in that area had not leveled off, but grew progressively worse in November and December.
In addition to the $18 billion in losses on assets comprised largely of subprime-related loans, Citigroup said it boosted loan-loss reserves by $4.1 billion, signaling further problems in its consumer businesses as deflated home prices, high energy and food costs, and rising unemployment weigh on people's ability to make their loan payments.
For the quarter, Citigroup announced a loss of $9.83 billion, or $1.99 a share, vs. earnings of $5.13 billion or $1.03 a share a year earlier. Citigroup's revenue fell 70% to to $7.22 billion.
Related Stories
ABC News Live