The company which posted more than $8 billion loss for the December quarter said in statement, "Today, we announced that we would separate the company, for management purposes, into two separate businesses Citicorp and Citi Holdings."
Hit by write-downs and losses in securities and banking verticals, higher credit losses and restructuring costs, the Vikram Pandit-led Citi on Friday posted a loss of $8.29 billion in the fourth quarter.
The company had a loss of $9.83 billion in the year-ago period. Following the split, traditional banking businesses would be held under Citicorp, while other riskier assets would come under Citi Holdings.
The banking major had revenues to the tune of $5.59 billion for the December quarter, against 6.42 billion dollars in the corresponding period a year earlier.
"Results reflect the negative impact from $7.8 billion in revenue marks in securities and banking, a $5.3-billion downward credit value adjustment on derivative positions, excluding monolines."
The firm also had a "$2.5 billion of losses in private equity and equity investments, $2 billion of restructuring costs, and a 6 billion dollar net loan loss reserve build," the statement added.
For the fourth quarter, Citi had the highest losses in the North American region to the tune of $11.02 billion, while losses in Asia stood at $371 million and in Europe, Middle East and Africa at $332 million.
"Our results continued to be depressed by an unprecedented dislocation in the capital markets and a weak economy," Pandit said, adding that in 2008, "Citi made significant progress in reducing risk from our balance sheet".
"Our legacy assets declined to approximately $300 billion, over $300 billion of assets are now covered by a loss sharing arrangement, and we added $14 billion to our loan loss reserves," he noted. For the year, Citi reported a net loss of $18.72 billion on revenues of $52.8 billion.
The company said since the third quarter of 2008, about 29,000 employees were given the pink slip. Further, nearly 52,000 jobs were cut globally last year.
Pandit said despite "unprecedented turbulence in the global financial markets," Citi employees have conducted themselves with the highest professionalism and integrity.
"... we will emerge from the current environment stronger, smarter, and better positioned to realise the full earnings power of this great franchise," he added.
Meanwhile Citi has received two lifelines from the Federal government worth $45 billion in addition to receiving guarantees for toxic assets worth over $300 billion.
On January 13, Citi had said it would combine the retail brokerage operations Smith Barney with the wealth management business of Morgan Stanley. In the joint venture Morgan Stanley Smith Barney, Citi would exchange Smith Barney for a 49 per cent stake in the joint venture Morgan Stanley Smith Barney and a $2.7 billion cash payment.
The deal is expected to result in a pre-tax gain of $9.5 billion for Citi.
Citigroup said its Asia operations suffered a loss of $371 million for the fourth quarter in 2008 and continued deterioration in the Indian markets pushed credit costs higher.
Out of the total loss of $8.29 billion incurred by the financial services major in the December quarter, the Asian operations saw a loss of $371 million, while the North American region witnessed a whopping loss of $11 billion.
The Asian operations posted a 63 per cent decline in revenues at $1.98 billion for the fourth quarter last year as compared with $5.29 billion in the year-ago period. The banking major's credit costs increased 66 per cent to $12.7 billion in the last three months of last year.
Citi's global cards business suffered from higher credit costs in the fourth quarter and in Asia it was mainly due to India.