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Citigroup Inc.'s global cards division incurred a fourth-quarter net loss of $610 million, the troubled financial giant reported today. Last year, Citi's card operations earned $934 million in net income. Card revenue during the fourth quarter, which ended Dec. 31, was $4.6 billion, down 27% from $6.3 billion during the same period in 2007. Citi boosted the card division's provision for loan losses, benefits and claims to nearly $3 billion during the quarter, up 67% from $1.8 billion a year earlier. Citi lost 7.75% net of card receivables during the quarter, up 297 basis points from 4.78% year over year. "It is unclear how closely credit-loss behavior in the current recession will correlate with the 1990s recession," Gary Crittenden, Citi chief financial officer, told analysts during a conference call this morning. "Loss rates in cards have now surpassed their historic highs." Charge-off rates are likely to increase given current projections that unemployment will continue to rise into late 2009 or early 2010, he said. Average receivables dropped to $191.3 million during the quarter, down 2% from $195.1 million a year earlier. Citi reported 175.5 million open card accounts as of the end of the quarter, down 7% from 188.6 million a year earlier. Purchase volume dropped 15%, to $102.7 billion from $120.3 billion. Companywide, Citi reported a net loss of $8.3 billion, a slight improvement from its $9.8 billion net loss in the fourth quarter of 2007.
