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JP Morgan ended up with a profit in the billions for Quarter 4 if 2009. Citigroup, on the other hand, lost billions. The company, which is 27% owned by the U.S. Treasury Department, reported a $7.6 billion loss for the fourth quarter of 2009, due in large part to the fact that the company repaid its TARP funds. Indeed, it is probably a good thing that the company repaid that money in 2009, since it gives Citi a chance to get something sort of like a fresh start in 2010. Of course, one has to consider that even without the pay back of TARP, Citi still lost more than $1 billion. This whole thing is reflecting poorly on Citi CEO Vikram Pandit.

Bloomberg reports on the loss to Citi:

“It’s been a tumultuous two years,” said William Fitzpatrick, a financial-industry analyst with Optique Capital Management in Racine, Wisconsin, which oversees about $850 million. “They’re probably done capital-raising, and investors now want some visibility on what the earnings power is.”

Citigroup may spend most of 2010 recovering from the bailout, grappling with more loan losses and pushing to sell or wind down unwanted businesses with more than $600 billion of assets, or a third of the bank’s total.

Even with the big loss, though, investors remain confident. The stock market is rallying today, and bulls are looking ahead to other earnings.  They might actually be hoping that losses from the 4th quarter will help wipe the slate clean for movements going forward. It will be interesting to see what will happen as more companies report their earnings throughout this week and next week.

Financial companies appear to be mixed in recovery, with some doing well and others struggling. However, it is clear that the real test will come in this, the first quarter of 2010. If financial companies can manage to pull in profit, and other companies can make good showings, it is likely to help inspire confidence and help the economy overall.