Profit desert

19 January 2010 By Antony Currie Follow @AntonyMCurrie

The bank’s performance is improving. But the Saudi investor wants a turnaround this year. Based on fourthquarter results, that ll be tough. Problem assets remain a millstone. And an $840 mln accounting snafu is an embarrassment. CEO Pandit will struggle to hit Alwaleed s goal.

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Citigroup reported a fourthquarter net loss of $7.6 billion, or 33 cents a share, in line with analysts' consensus estimates. That includes a $7.4 billion tax break. Excluding the costs of paying back capital from the U.S. government's Troubled Asset Relief Program and exiting the loan loss guarantee scheme, the bank lost $1.4 billion, or 6 cents a share.

Citicorp, which comprises the group of businesses Citi considers core, made $1.7 billion, including a $162 million tax break. Citi Holdings, which comprises legacy toxic assets and other unwanted assets, lost $2.5 billion. Citi Holdings' assets were reduced by $70 billion to $547 billion.

The bank also announced that it was taking a onetime charge of $840 million reflecting the cumulative impact of a correction of an error in calculating the CVA on the company's fair value option debt in prior periods. That refers to the accounting rule stipulating that banks must mark to market the value of their debt each quarter.

Citigroup fourthquarter earnings release

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