The loss of $5.1 billion for January-March period marks the second consecutive quarter in the red for the global banking behemoth, which is yet to see profitability ever since Nagpur-born Pandit assumed the charge late last year.
The company attributed its weak performance mainly to its sub-prime related direct exposures in fixed income markets and highly leveraged finance commitments.
The quarterly loss came on the back of $6 billion of sub-prime crisis-related write-downs and increased credit costs and a write-down of $3.1 billion for loans it extended to fund the corporate buyouts. Besides, it recorded a $3.1 billion of additional credit costs related to consumer lending and also wrote down $1.5 billion for its exposure to bond insurers and another $1.5 billion for auction-rate securities.
The company's first quarter revenue fell by 48 per cent to $13.2 billion. The bank said that in the US consumer business, its higher credit costs reflected an increase in net credit losses of $1.1 billion and an incremental net charge to increase loan loss reserves of $1.2 billion. "In international consumer, higher credit costs reflected an increase in net credit losses of $461 million and an incremental net charge to increase loan loss reserves of $312 million. The increase in credit costs was primarily driven by Mexico cards and India consumer finance, as well as by acquisitions and portfolio growth," it said.
Increased credit costs in India also added to the company's international consumer finance business. "Outside of Japan, the net loss of $99 million (for international consumer finance business) mainly was due to an increase in credit costs of 92 per cent, primarily driven by India, and a repositioning charge," the bank said.
Besides, India was the prime reason behind the decline in its overall Asia net income. "The decline in (Asia) net income reflected higher expenses associated with increased collection efforts, primarily in India, and branch openings, as well as higher credit costs in India consumer finance," Citigroup said here.
"Our financial results reflect the continuation of the unprecedented market and credit environment and its impact on our historical risk positions," Citigroup CEO Pandit said.
"During the first quarter, valuations of our sub-prime related exposures in fixed income markets and leveraged finance assets have further declined and credit costs in our consumer lending businesses have increased," he added.
