Citigroup's $2.2b losses

Citigroup, the embattled American bank, yesterday unveiled huge losses for the second year in a row.

The bank said it shed US$1.6 billion ($2.2 billion) last year after it plunged into the red in the fourth quarter, largely thanks to repaying US$6 billion of US government support.

The total loss for the last three months of the year was $7.6 billion. However, while the bank was in the red its performance was significantly better than in 2008 when losses of $27.6 billion were racked up.

The bank's pay and bonus pool fell by a fifth to $25 billion, but Citgroup had 265,000 workers at the end of the fourth quarter, a big reduction on previous years.

Staff fell by 18 per cent. The company said pay per employee would be "about the same" as last year.

John Vandeventer of the Service Employees International Union said: "This report begs the question: how badly does a Wall Street bank have to screw up before they don't shower themselves in billions of dollars of bonus pay?"

JP Morgan last week reignited the controversy by announcing a sharp rise in bonuses to its investment bankers, despite chief executive Jamie Dimon saying he was not satisfied with the bank's performance.

Meanwhile, Credit Suisse, said yesterday it would cut its global bonus pool by 5 per cent to pay for the 50 per cent tax on British investment bankers' bonuses imposed by Chancellor Alistair Darling. Bonuses for its top 400 managers in Britain would be cut by a further 30 per cent.

Citigroup chief executive Vikram Pandit insisted that despite its losses, his bank had made "huge progress" over the year.

"It was our responsibility to get our own house in order. We greatly improved Citi's capital strength, reduced the size and scope of the company, and refocused our business strategy to take advantage of our unmatched global network," he said.

He also noted loan losses are falling. Provisions in the fourth quarter were US$8.2 billion, down 36 per cent from the previous year and 10 per cent from the previous quarter.

- INDEPENDENT