The Desi Butcher Vikram Pandit-led financial mess Citigroup reported a hefty loss of $5.1 billion on revenues of $13.2 billion in its first quarter ended March 31 and will throw another 9,000 employees on the streets.
On a conference call with analysts, Citigroup CEO Vikram Pandit acknowledged:
To start with, weâ€™re not happy with our financial results this quarter although theyâ€™re not completely unexpected given the assets we hold.
Who would be happy with these crappy results? Reaching a new acme of greed, grasping Wall Street pigs in top positions have taken home hundreds of millions of dollars and ultimately left investors and employees holding the bag when the inevitable crash came.
Results include $6.0 billion in pre-tax write-downs and credit costs on sub-prime related direct exposures, write-downs of $3.1 billion on funded and unfunded highly leveraged finance commitments, a downward credit value adjustment of $1.5 billion related to exposure to monoline insurers, write-downs of $1.5 billion on auction rate securities inventory, and a $3.1 billion increase in credit costs in global consumer.
Revenues fell 48% year-over-year because of significant write-downs in sub-prime related direct exposures in fixed income markets and highly leveraged finance commitments.
In the usual blah-blah-blah that accompany earnings announcements, Vikram Pandit said:
Our financial results reflect the continuation of the unprecedented market and credit environment and its impact on our historical risk positions. 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. Despite the negative factors in the broader markets, we continue to see strong momentum throughout the organization with robust volumes in many of our products and regions.
In plain English, Vikram Pandit is saying that things got worse at Citigroup in Q1.
To be fair, Vikram Pandit came on board as Citigroup CEO in December 2007, well after the meltdown at Citi was under way.
But let us not forget that Citigroup also announced a writedown Friday of $202 million in the value of Old Lane (the multi-strategy hedge fund run by Vikram Pandit and acquired by Citigroup last year). Vikram Pandit joined Citi in April 2007 when the bank acquired Old Lane for $800 million.