Citigroup underlined the plight of financial firms squeezed by the credit crunch and the slowing US economy on Friday by announcing a $5.1bn quarterly loss, nearly $16bn in writedowns and 9,000 job cuts.

But its shares rallied in New York, rising 4.5 per cent to end Friday’s session at $25.11, amid investors’ hopes that it had absorbed the biggest blows from the crisis and was moving to slash costs and shrink its balance sheet.