Citigroup ( C) reported a third-quarter loss of $2.8 billion, or 60 cents a share, narrower than a loss of 70 cents a share that analysts were expecting. Citi said the loss from continuing operations in the quarter was $3.4 billion, or 71 cents a share, primarily because of fixed income writedowns and higher consumer credit costs. A year earlier, Citi reported net income of $2.2 billion, or 44 cents a share. The quarter included $4.4 billion in net pretax writedowns in its securities and banking operations, $4.9 billion in net credit losses, and a $3.9 billion net charge to increase loan loss reserves, the bank said in a statement Wednesday. Citi said it reduced headcount by about 11,000 since the second quarter of 2008. "While our third-quarter results reflect both a difficult environment as well as continued writedowns on our legacy assets, we are making excellent progress on the parts of our business we control, including expense reduction, headcount, and balance sheet and capital management," said Vikram Pandit, Citi's CEO. Last week, Citi lost a battle to Wells Fargo ( WFC) over ownership of Wachovia ( WB). Citi on Sept. 29 had offered $2 billion, or $1 a share, for just Wachovia's banking operations, with the help of the Federal Deposit Insurance Corp. The FDIC agreed to take on most of the risk in Wachovia's troubled loan portfolio due to Option ARMs inherited from its 2006 Golden West acquisition. Just four days later, Wells Fargo offered Wachovia $15 billion, or $7 a share, to acquire the whole company. Citi slapped a lawsuit on the two banks saying they violated a so-called exclusivity agreement it had signed with Wachovia.
Citi forewarned that third-quarter results would be disappointing during a conference call to discuss its acquisition of Wachovia's banking operations. At the time, the company said the loss was expected to be in the range of between $2.5 billion and $5.1 billion. On Wednesday, JPMorgan Chase ( JPM)reported third-quarter earnings, which came in better than expected, but still fell 84% from the year-ago quarter, as the economic environment deteriorated. Wells Fargo reported an expected drop in third-quarter earnings Wednesday, though results beat expectations on higher net interest margin and "tremendous" growth in deposits. Bank of America's (BAC) profit fell by more than half according to a release issued roughly two weeks ahead of schedule. The company also said at the time that it was cutting its dividend in half and looking to raise capital. Wachovia is set to report earnings on Oct. 22.