Citigroup's $7.6 billion loss

Citigroup was once the world's biggest bank.
 
The recession put an end to that but it's still the biggest in America and Citi's quarterly results have the potential to move markets on Wall Street up or down.
 
The banking giant has just reported a whopping loss of $7.6bn for the last three months of 2009.
 
Vikram Pandit, who has run Citigroup for the past two years, put a brave face on things, pointing out that without the bailout handbacks it would have been more like $1.4bn in the red for the fourth quarter.
 
But it must still sting for Pandit because despite his efforts to reorganise the firm - which included axing 100,000 jobs in a year - he has been told by Alwaleed Bin Talal, a leading Citi shareholder and Saudi billionaire, that patience is wearing thin. And unless things improve down at Citi HQ, Pandit can kiss goodbye to the corner office with the deep shag pile carpet and the company chauffeur.

 

Vulnerable in downturn
 
Citigroup has a finger in almost every financial pie the world over, but it does less investment banking and more consumer loans than many of its major Wall Street rivals, which makes it vulnerable in a downturn.
 
Citi's loss for the whole of 2009 was $1.6bn after three reasonable business quarters. But the $7.6bn bailout inflated figure is the one people are likely to remember for now.

 

All things being equal, a $1.6bn full year and a $7.6bn Q4 loss in '09 is a lot better than '08, when Citi lost $27.7bn in 12 months, with $17.3bn going in the last quarter alone.

 

Last week, President Barack Obama announced an open-ended tax on big banks designed to recover the money US taxpayers coughed up in bank bail-outs.

 

He said at the time: "My commitment is to recover ever single dime the American people are owed."

 

 

That tax amounted to a "we want our money back" warning from the Obama administration to the big bankers, because at the height of the financial crisis, the US treasury pumped billions of dollars of public money into the commercial banks just to keep them going.

 

In Citigroup's case, that amounted to more than a quarter of the company's stock.
 
The Citi loss comes hard on the heels of rival JP Morgan, which reported a profit of $3.3bn for the same three-month time-frame.

 

Bank of America, Morgan Stanley, Wells Fargo and Goldman Sachs all report their fourth quarter 2009 results in the coming days.