Citigroup Reports Loss on Writedowns, Credit Costs

April 18 (Bloomberg) -- Citigroup Inc. posted a $5.11 billion loss, less than analysts' most pessimistic estimates, and cut 9,000 jobs, sending its shares higher and sparking a rally in U.S. stocks and the dollar.

Citigroup, the biggest U.S. bank by assets, reported almost $16 billion of writedowns and increased bad loan reserves as customers fell behind on home, car and credit-card payments. Merrill Lynch & Co's. Guy Moszkowski, Institutional Investor's top-rated brokerage analyst, had predicted an $18 billion writedown. The first-quarter net loss of $1.02 a share compared with Moszkowski's estimated loss of $1.66.

``People are assuming the worst,'' Walter Todd, a portfolio manager at Greenwood Capital Associates, said in an interview on Bloomberg radio. ``Expectations are low enough that you can have some positive stock performance even off a bad number.''

Citigroup climbed $1.64, or 6.8 percent, to $25.66 at 11:10 a.m. in New York Stock Exchange composite trading, after surging as high as $25.80 earlier today. The Standard & Poor's 500 Index rose 1.7 percent and the dollar gained the most against the euro in more than four weeks.

The bank's writedowns and credit losses from the collapse of the subprime mortgage market now total almost $40 billion, more than Zurich-based UBS AG and Merrill. Vikram Pandit, Citigroup's chief executive officer, has bailed out about 10 investment funds, replaced his chief risk officer and raised $30 billion to replenish capital since he succeeded Charles O. ``Chuck'' Prince in December. READ MORE