Citigroup upbeat as losses cut

Citi, which employs 9,000 staff in the UK, posted an annual net loss of 1.6 billion US dollars (980m), down from 27.7 billion dollars

(16.9bn) in 2008.

The bank said employee pay and benefit expenses were down 20 per cent compared to the previous year, to 25 billion dollars (15.3bn) – although it has reduced its direct headcount by almost 100,000 since the start of 2008.

In the second major banking report from Wall Street this month, the firm said it had repaid 20 billion dollars of loans that it received from the US government.

Citi's losses for the fourth quarter were 7.6 billion dollars (4.7bn), including the government payback.

Citi was hit hard by the credit crisis and recession, receiving 45 billion dollars (27.5bn) in bailout money.

It raised the 20 billion dollars in new capital during the fourth quarter to repay bailout funds.

Meanwhile the US government converted 25 billion dollars (15.3bn) of the bailout money into a 34 per cent stake in the bank and it said last month it would sell its shares over the next year.

Citi has failed to see the upswing enjoyed by some of its rivals, who have ridden a wave of better investment banking results, helping them offset their losses from bad loans. Its report is the latest in a run of Wall Street big hitters to report results as the major US players reveal how they fared in the year after the Lehman Brothers collapse.

Last week, JP Morgan Chase produced forecast-beating results showing profits more than doubling to 11.7 billion US dollars (7.2bn).

But public focus is on bonus plans, with significant payouts risking outrage from taxpayers who helped prop up the industry during the financial crisis.

President Barack Obama has set out plans to claw back 90 billion US dollars (55bn) in taxes over 10 years and attacked "obscene" payouts, promising to retrieve "every dime" for the taxpayer.