Citi Posts $8.3B Loss, Prepares to Split in Two

Still smarting from bad mortgage bets, the company will split to remain solvent
By Clay Dillow,  Newser Staff
Posted Jan 16, 2009 7:52 AM CST
A Citi Smith Barney logo is shown at the bank's office Thursday, Jan. 15, 2009 in New York. Citigroup's CEO Vikram Pandit said Wednesday that the company is going through a "long-term transformation."   (AP Photo/Mark Lennihan)
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(Newser) – Citigroup lost $8.29 billion in the fourth quarter—twice as much as expected—as the credit crisis continues to batter big banks, Bloomberg reports. The bank suffered a net loss of $1.72 per share, falling far short of analysts’ estimates. Citigroup, which lost 77 percent of its trading value last year as it accepted $45 billion in bailout funds, now looks to split into two entities.

Citigroup will move units it wishes to keep, such as branch banking, corporate lending, and private banking, into a business called Citicorp, while “non-core” units such as CitiFinancial, brokerage, and retail asset management will collect under the umbrella of Citi Holdings. Citi will continue to shed non-essential units and cut deals to free up cash, such as the pending $21 billion Smith Barney joint venture with Morgan Stanley.