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US banking giant Citigroup reported a 5.1 billion dollars net loss during the first quarter and said it would cut an additional 9,000 jobs as it struggles with bad bets on subprime mortgages. It was the second consecutive quarterly loss for the banking titan, heavily exposed to the subprime, or high-risk, mortgage crisis stemming from the worst US housing slump in decades and signs of recession in the world’s biggest economy.

But the first-quarter loss was almost half the prior quarter’s loss of 9.83 billion dollars, and coupled with cost-cutting measures such as job cuts Citigroup Inc., under its new chief executive Vikram Pandit, appears to be putting the credit crisis behind it, analysts said. Citigroup took 13.9 billion dollars in write-downs during the first quarter, the bank’s chief financial officer, Gary Crittenden, said in a conference call. Crittenden cited additional write-downs that had not appeared in a list of write-downs and the company’s earnings report, which AFP had tallied that list at approximately 12 billion dollars. Earnings per share were a negative 1.02 dollars, seven cents steeper than the loss that most analyst’s forecast.

Citigroup is now the US bank hardest hit by the subprime crisis that erupted in August, wreaking havoc on financial markets and leading to a credit squeeze that is stifling growth in the global economy. The bank has taken more than 30 billion dollars in write-downs since the crisis, more than investment bank Merrill Lynch, which reported a net loss of nearly two billion dollars and nine billion dollars in write-downs.

Citigroup CFO Crittenden said in the conference call that 9,000 jobs would be cut in the first quarter, most of them in its retail banking arm, and in addition to the 4,200 workforce reductions announced in the previous quarter. The bank had a workforce of about 370,000 at end-March. Citigroup said the first-quarter net loss was mainly driven by fixed-income results and higher consumer credit costs.

Citigroup Global Services (CGSL) has put the sale of its BPO operations on hold. CGSL is the India outsourcing operation of Citigroup which also has similar interests in China, Philippines, Latin America and Europe. The group which had started the sale process sometime back was close to finalizing the deal with Genpact in late 2007, but differences over the terms of the contracts and the price the deal could not go through. It now wants to relook at all the operations and has put the sale of the Indian operations on hold.

Citigroup was reported last year that Genpact had emerged as the buyer for Citi’s BPO business, Citigroup Global Services. Accordingly Citigroup and Genpact were close to coming to an agreement. But differences over the term of contracts and the price could not be resolved and the market crash has ensured a major fall in valuations of most major BPO firms. At $700 million, the deal suddenly looked expensive for Genpact. CGSL handles multiple operations for Citigroup entities globally, including retail banking operations like credit cards, mortgages, personal loans and the like. It has operations in Mumbai, Chennai and Gurgaon, too. It has some 11,000-12,000 employees, of which half service the international operations of the group. It caters to operations in more than 40 countries. Citigroup is present in over 100 countries internationally.

Citigroup has a separate knowledge in outsourcing processing activities for corporate and investment banking clients. It also has a technology outsourcing, Citi Technology Services. Citigroup had recently said it was writing down $22.2 billion. It posted a $9.83 billion loss for the fourth quarter as against a profit of $5.1 billion in the previous year. For the full year, Citigroup net income dropped to $3.62 billion as against a profit of $21.53 billion in 2006. With the fall in profits, the group is likely to take a hard look at its expenses and would be looking at going in for an aggressive job cut. Currently, it has already announced 4,200 job cuts. The move is likely to help low-cost operations of the group like India and Latin America.

Vikram Pandit is the new CEO of Citigroup and he is in the midst of undertaking wide-ranging changes at the firm to cut losses it had suffered due to subprime crisis. It might include some job cuts or change over workforce. Besides the Indian outsourcing business, Citigroup also has outsourcing operations in overseas and has to relook at all these operations globally and looking to these operations it has put the sale process on hold.