Updated from 7:49 a.m. EST
Citigroup (C Quote - Cramer on C - Stock Picks) reported a nearly $10 billion loss and posted an $18.1 billion writedown, forcing the bank to cut its dividend, slash jobs and pound the pavement for additional funds from domestic and foreign investors in order to steady its shaky business.
The nation's largest bank reported a fourth-quarter net loss of $9.83 billion, or $1.99 a share. That compares with a profit of $5.13 billion, or $1.03 per share for the same period last year. The per-share loss was nearly double what analysts polled by Thomson Financial had predicted.
Cramer: Expect More Doom at Citi |
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Citi has been swooning on losses from leveraged loans and mortgage debt, and it saw the ouster of former CEO Charles Prince and subsequent appointment of Vikram Pandit as chief executive. The losses were the biggest in its nearly 200-year history. The bank's unsteady balance sheet forced it to obtain $14.5 billion in capital from domestic and foreign investors and cut its dividend by 41% to 32 cents.
The company has raised about $12.5 billion from a consortium of investors that includes former CEO Sandy Weill and Saudi billionaire Prince Alwaleed. That consortium also includes the Kuwait Investment Authority and the New Jersey Division of Investment. An additional $2 billion will be raised via newly issued convertible shares that will be sold to public investors.
"The board determined to reset the dividend to a level compatible with the company's growth opportunities and business mix while continuing a meaningful income payout for shareholders," Citi Chairman Sir Win Bischoff said in a statement.
Mark DeCambre
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