Citigroup Inc, the biggest U.S. bank by assets, avoided more severe expectations for losses on Thursday after reporting a $5.1 billion loss in its first quarter, sparking a relived rally among investors.

The New York-based bank also said that it would cut an additional 9,000 jobs after the loss attributed to falling prices for mortgage and credit market related assets. The company wrote-down assets by more than $12 billion.

Shares rose more than 6.5 percent.

Citigroup chief Financial Officer Gary Crittenden did not rule out the need to raise additional capital to bolster the company's ailing balance sheet.

Citigroup reported a loss of $5.1 billion, or $1.02 per share, compared with a gain of $5 billion, or $1.01 per share in the same quarter a year earlier. The loss was slightly higher than a consensus estimate. A poll of analysts had indicated an estimated loss of 95 cents per share, according to Thomson Financial.

Total revenue also came in above expectations, reaching $13.2 billion. Analysts had estimated $12.8 billion in revenue.

However some analysts had predicted much bigger losses. Analyst Guy Moszkowski with Merrill Lynch & Co. had estimated a net loss of $1.66 per share.

Investor were pleased with the report, sending shares up more than 6.5 percent. In late morning trading, Citigroup was up $1.59 to $25.62.