For Q3 2008, Citigroup posts USD 1.4 billion in losses from card-backed assets and predicts that throughout 2009, such losses are to continue and even reach record levels.
In Q3 2007, the company gained USD 169 million from credit card securitisations. As a result of higher delinquencies on first mortgages, unsecured personal loans, credit cards and auto loans, the company decided to add USD 2.3 billion credit reserves for the North American consumer business as well as USD 855 million for the consumer business outside the US. Citigroup is not the only company that has announced similar strategies as attempts to deal with the worsening economical situation. American Express has announced its intention to cut 7,000 jobs, representing 10 percent of the company's work force across the world. The research firm Innovest StrategicValue Advisors also indicates in a report that banks are to charge off USD 18.6 billion in delinquent credit-card accounts during Q1 2009 and USD 96 billion throughout the entire year.
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