India's best known banker, Vikram Pandit, Citi CEO -- to attract Pandit to manage its alternative investments unit, Citi purchased his hedge fund, Old Lane, for $800 million. Although the fund never made much profit, the transaction netted Pandit $165 million. Subsequently, Citi wrote down more than $200 million in losses. Pandit used some of his proceeds to purchase the late actor Tony Randall's Manhattan apartment for $17.9 million, and Citi shareholders took the loss.

Citigroup, the US bank that is 27% owned by the Treasury Department, today reported a $7.6 billion loss on costs to exit the government’s bailout program.

The fourth-quarter loss of 33 cents a share lower than the record loss of $17.3 billion, or $3.40 a share, a year earlier, Citigroup said today in a statement.

Citi had to take a charge of $8 billion pretax when it repaid $20 billion of bailout funds in December to avoid being left behind by rival banks that exited the Troubled Asset Relief Program (TARP).

Excluding items related to the repayment of government aid, the latest loss was 6 cents a share. Revenue dropped 4.3% to $5.41 billion.

Loan-loss provisions were $8.2 billion, down 36% from the prior year and 10% from the prior quarter. Net credit losses fell to $7.1 billion sequentially from $7.9 billion.

"We have made enormous progress in 2009," said Vikram Pandit, Chief Executive Officer of Citigroup."It was our responsibility to get our own house in order. We greatly improved Citi's capital strength, reduced the size and scope of the company, and refocused our business strategy to take advantage of our unmatched global network. We created Citi Holdings to rationalize non-strategic businesses, totally overhauled risk management, cut costs by over $13 billion annually, reduced headcount by 100,000, and reduced assets by $500 billion from peak levels. And to take advantage of all these changes, we assembled a talented new management team focused on the new Citicorp franchise to move us forward.

"We also completed the repayment of $20 billion invested in the company by the U.S. government through the TARP and exited the loss-sharing agreement with the government,"said Pandit. "As we enter 2010, we are strongly capitalized, significantly more efficient, and are executing on a clear strategy that is focused on clients. With the commitment and dedication of our people, we have created a strong foundation for the future."

Pandit concluded:"In the near term, we will continue to focus on sustainable profitability and growth, and supporting the global economic recovery. I believe we are positioned for long-term success, and have a strategy that combines our international footprint, global talent and unique capabilities to serve our clients and customers here and around the world. We serve nearly every Fortune 500 company and 85% of the top global companies, enabling liquidity and capital flows by providing the financial infrastructure that facilitates these companies' international operations. Citi is one of the great franchises in financial services, and with our renewed financial strength and strategy, we can now completely focus on executing this strategy."

Results detail

Last Friday, rival JPMorgan Chase & Co., reported that profit more than quadrupled from a year earlier to $3.28 billion as investment-banking fees rose.