Citigroup posts $5.11 bln loss, to cut 9,000 jobs

By Jonathan Stempel and Dan Wilchins

NEW YORK (Reuters) - Citigroup Inc (C.N) posted a $5.11 billion quarterly loss on Friday and said it will cut another 9,000 jobs after suffering billions of dollars of write-downs tied to mortgages, other debt and a slumping economy.

The loss was larger than expected and reflected more than $16 billion of write-downs and credit-related costs at the largest U.S. bank.

Investors nevertheless took comfort that the bank and its new chief executive, Vikram Pandit, are taking steps to get past credit problems, drive down expenses, and restore luster to a stock down by about half over the last year.

Citigroup shares traded up $1.78, or 7.4 percent, at $25.81 in afternoon trading on the New York Stock Exchange. Results helped spark a broad stock market rally, with the Standard & Poor's 500 index .SPX up 2.1 percent.

"It's a cathartic quarter," said Arthur Hogan, chief market analyst at Jefferies & Co in Boston.

Citigroup's net loss totaled $1.02 per share, and compared with a year-earlier profit of $5.01 billion, or $1.01 per share. Revenue fell 48 percent to $13.22 billion.

Analysts, on average, had expected a loss of 96 cents per share on revenue of $14.35 billion, according to Reuters Estimates.

"We're not happy with our financial results this quarter," Pandit said on a conference call. Nevertheless, he said his confidence in Citigroup's future is "extremely high."

Citigroup has announced 13,200 job cuts in 2008, including 4,200 disclosed in January. It said about 1,300 people in its investment banking unit lost jobs in the first quarter.

The bank said the 9,000 additional cuts will take place in the next year, including about 7,000 in consumer banking. Citigroup said it ended March with about 369,000 employees.

"Bottom line, progress is evident," wrote Susan Roth Katzke, an analyst at Credit Suisse, in a report. "There remains a tremendous amount of work to be done."

SHAKING THE TREES

Pandit is trying to focus on stronger businesses and slash exposure to risky assets after years of poor expense and risk management left New York-based Citigroup bearing the full brunt of the global credit market crisis.

Expenses fell 2 percent from the fourth quarter. In the last two weeks, Citigroup said it would sell its Diners Club International credit card network and most of its North American commercial lending and leasing business.

On Thursday night, the bank sold $12 billion of leveraged loans, which are used to fund corporate buyouts, Chief Financial Officer Gary Crittenden said in an interview. The recent pace of asset sales will likely continue, he said.