Page last updated at 21:22 GMT, Friday, 9 May 2008 22:22 UK

Citigroup to shed $400bn assets

Citigroup sign
Citigroup's sub-prime losses so far are second only to those at UBS

US banking giant Citigroup has said it wants to sell $400bn (205bn) of assets over the next three years as part of its bid to return to profit.

It has $500bn of "legacy assets" that it wants to reduce to $100bn.

Since late 2007, Citigroup has raised more than $36bn in capital to fund its losses and write-downs from sub-prime mortgages and other debt.

Last week, it announced plans to sell $3bn worth of new shares to bolster its financial position.

That came shortly after it issued $6bn of preferred shares.

Further losses?

It lost just under $15bn for the six months to the end of March, and its write-downs are second only to UBS.

Legacy assets are long-held or even sleeping assets - including businesses - that have been accumulated by the group over time, but are now considered non-core.

As part of the new plan, Citigroup also hopes to achieve annual net revenue growth of 10% from core operations, including credit card operations, consumer banking, securities and banking, and wealth management.

In an attempt to reduce costs, the firm has also announced job cuts of some 13,200 since the credit crisis struck.

Even if the bank has seen the worst of the credit crisis, many analysts say there is still likely to be more to come.

Analyst Mike Mayo of Deutsche Bank estimated on Thursday that Citigroup's $29bn mortgage investments and related products could lead to a further $15bn write-down.

Citigroup also said on Friday that it expected revenue over the next two to three years to grow 9% but shares in the firm closed 2.8% lower, reversing earlier gains.




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