Second quarter results at Citigroup better than expected

| July 20, 2008 | 0 Comments

Citigroup, which is America’s largest bank, has posted a second quarter loss of $2.5 billion (£1.25 billion) as a result of further write-downs of $11.7 billion due to the credit crunch and mortgage related assets.

Despite the loss, the results were better than Wall Street was expecting and shares gained 7.7% on Friday. Its shares have halved in the last 12 months after it ran up losses of $45 billion - this represents one of the worst performances by any bank.

Last month, the banking giant revealed it was axing up to 6,500 investment banking jobs while in April, it said that 9,000 jobs would go in addition to the 21,000 laid off in the last 12 months.

There has been speculation that chief executive, Vikram Pandit, could be ousted if he doesn’t get a firm grip on the bank’s difficulties.

Following the results, Mr Pandit said he was encouraged by progress but added that there is still a lot to be done.

Credit costs at Citigroup have soared to $7.2bn, as a growing number of its own customers are defaulting on their loans.

Consequently, its losses from mortgage-backed debt may be slowing but losses from the bank’s own mortgages, car loans and credit cards are growing.

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