Citigroup Loses $7.6 Billion
This was expected. Citigroup announced that they had lost around $1.6 billion in the 4th quarter of 2009, mainly from trying to pay off the federal government, and that ends up giving them a loss of $7.6 billion for the year.
That’s certainly not the best news for a banking system that’s trying to convince everyone that they’re ready to be self sustaining and push forward for 2010. That loss, by the way, includes the tax breaks that they know they’re getting from the federal government that were related to the TARP loan, but doesn’t include any of the projected fees that President Obama is planning on hitting all the banks that got TARP money with.
Perspective can be a wonderful thing. The loss was compared to last year’s loss of $17.3 billion and thus is seen as things improving. Maybe my math is bad, but when you show a loss in 3 of 4 quarters in a year, and the only quarter you didn’t show a loss was because of the sale of one of your divisions, that’s not good at all in my eyes. Sure, it’s not as bad, but it’s still not good. And it’s definitely not Chase good, which posted a $3.3 billion profit.
I hate to be the one predicting bad news, but I don’t see Citigroup making a profit in the first quarter of 2010 either. They’re reducing their mortgage division, suffering more losses in their credit card division, and frankly have become too unwieldy. They’re saying they believe some of their foreign markets might be improving, but that’s “iffy” talk and nothing concrete. They’re missing this, but the American public doesn’t trust them after a series of sneaky and underhanded moves in 2009. It’s going to take more than “thank you” to get our trust back.
I don’t wish Citigroup bad karma, but it seems they’ve found a way to generate that on their own.