Citigroup Inc. (NYSE:C), the third-biggest U.S. bank, said it is considering further spending cuts in its securities and banking unit this year after an investment of almost $1 billion failed to yield enough revenue.
The bank, which announced last week 1,200 job cuts to save $600 million this year at the securities and banking division, is looking to "further restructure" if revenue doesn't rebound this year, Chief Financial Officer John Gerspach told investors in a conference call Tuesday, Bloomberg reported.
Gerspach said the securities and banking division's 2011 performance was "disappointing and unacceptable," pointing to more possible cuts.
"While we are strategically committed to securities and banking, we are not oblivious to the fact that our cost structure cannot be justified by our current revenues," Gerspach said, according to a transcript of the call.
Citi's fourth-quarter profit fell 11 percent due to a huge drag from the investment banking division, which saw a 29 percent decline in revenue. The European debt crisis interrupted Citi's Chief Executive Vikram Pandit's plans to rebuild the bank -- after its $45 billion government bailout in 2008 -- and increase revenue.
Gerspach said while Citi will not rush into decisions on expense and capacity reductions, neither will it delay them "in the name of long-term strategy."
In a related matter, Bank of America Corp. (NYSE:BAC) Chief Executive Officer Brian Moynihan, speaking after a panel discussion Wednesday at the World Economic Forum's annual meeting in Davos, Switzerland, predicted 2012 will be a "reasonably good year" for investment banking, according to Bloomberg.
When asked whether Bank of America would continue to cut cost, Moynihan said he would "keep shaping" the business in response to the turmoil in Europe.
Bank of America lost 5 cents to $7.24 in Wednesday morning trading. The shares have declined 47 percent in the past year.
Citigroup was 5 cents lower at $29.36 on Wednesday. The shares have dropped 39 percent in the last twelve months.