Citigroup has unveiled a major restructuring under which will split in two and dump weaker businesses and troubled assets.
At the same time it reported much worse than expected results for the fourth-quarter. Once the world’s biggest financial company Citigroup has suffered massive losses. Frank Braden, an Equity Analyst at Standard and Poor’s, said there is no end in sight: “Obviously you’re seeing the downturn in the housing market continuing,the turmoil in the sub-prime markets is going to continue at Citigroup, they have large exposure to sub-prime related assets and that’s going to affect the stock, we think, for several quarters to come” Citigroup made some money from selling its banks in Germany but lost 6.25 billion euros in the final three months of 2008, its fifth straight quarterly loss; over those five quarters it lost the equivalent of 21.5 billion euros. At the same time Bank of America announced 1.3 billion euros worth of losses for the fourth quarter and said it is getting another 15 billion euros in US government aid. The fact that Bank of America and Citigroup continue to receive bailout money signalled to investors that Washington is not going to let the major US banks fail.