Andrew Clark in New York
guardian.co.uk, Thursday October 16 2008 14.26 BST
The US bank Citigroup has suffered its fourth consecutive quarterly loss after taking hits of more than $13bn to cover liabilities arising from the credit crunch.
As the global financial crisis continued to paralyse the credit markets, Citigroup lost $2.81bn for the three months to September, compared to a $2.2bn profit for the same period last year.
The bank cut 11,000 jobs during the quarter, taking the total reduction in its payroll this year to 23,000 people.
Citigroup's chief executive, Vikram Pandit, described conditions as "turbulent" but put a brave face on the figures.
"Our third-quarter results reflect both a difficult environment as well as continued write-downs on our legacy assets," he said. "We are making excellent progress on the parts of our business we control, including expense reduction, headcount and balance sheet and capital management."
Pandit took the top job late last year when Citigroup's former boss, Charles Prince, was ousted. But he is still grappling with the bank's exposure to derivatives and mortgage-related securities.
The bank today revealed write-downs of $4.4bn in securities and banking, $4.9bn in net credit losses and a $3.9bn charge to cover net loss reserves.
Citigroup recently lost its title as America's biggest bank to JP Morgan in terms of assets. JP Morgan's recent acquisitions of Bear Stearns and Washington Mutual have given it an edge.
Meanwhile, the Wall Street firm Merrill Lynch, which is shortly to be acquired by Bank of America, revealed a bigger than expected quarterly loss of $5.2bn, up from $2.2bn a year ago.
"We continue to reduce exposures and de-leverage the balance sheet prior to the closure of the Bank of America deal," said Merrill's chief executive, John Thain.
Merrill took a series of write-downs including a $3.8bn loss blamed on "severe market dislocations" during the month of September including its exposure to the failed bank Lehman Brothers.
As the global financial crisis continued to paralyse the credit markets, Citigroup lost $2.81bn for the three months to September, compared to a $2.2bn profit for the same period last year.
The bank cut 11,000 jobs during the quarter, taking the total reduction in its payroll this year to 23,000 people.
Citigroup's chief executive, Vikram Pandit, described conditions as "turbulent" but put a brave face on the figures.
"Our third-quarter results reflect both a difficult environment as well as continued write-downs on our legacy assets," he said. "We are making excellent progress on the parts of our business we control, including expense reduction, headcount and balance sheet and capital management."
Pandit took the top job late last year when Citigroup's former boss, Charles Prince, was ousted. But he is still grappling with the bank's exposure to derivatives and mortgage-related securities.
The bank today revealed write-downs of $4.4bn in securities and banking, $4.9bn in net credit losses and a $3.9bn charge to cover net loss reserves.
Citigroup recently lost its title as America's biggest bank to JP Morgan in terms of assets. JP Morgan's recent acquisitions of Bear Stearns and Washington Mutual have given it an edge.
Meanwhile, the Wall Street firm Merrill Lynch, which is shortly to be acquired by Bank of America, revealed a bigger than expected quarterly loss of $5.2bn, up from $2.2bn a year ago.
"We continue to reduce exposures and de-leverage the balance sheet prior to the closure of the Bank of America deal," said Merrill's chief executive, John Thain.
Merrill took a series of write-downs including a $3.8bn loss blamed on "severe market dislocations" during the month of September including its exposure to the failed bank Lehman Brothers.
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