Citigroup (C) 01 (May 08 - Nov 08)

[LenaHuat]

This ticker's lying low. After HSBC, I wonder if it will be the next consumer bank to lay off employees?

[blid2def]

This ticker's lying low. After HSBC, I wonder if it will be the next consumer bank to lay off employees?

Link: http://tinyurl.com/4846c3 (MarketWatch)

Might be lying lower (or flat) if this really happens... these ratings agencies... "有福同享,有难你当"...

S&P, Moody's say Citigroup still on downgrade review
By Wallace Witkowski
Last update: 3:59 p.m. EDT Oct. 10, 2008

SAN FRANCISCO (MarketWatch) -- Standard & Poor's and Moody's said Friday that they will keep Citigroup Inc.'s ratings on review for a possible downgrade despite the bank's lost bid for Wachovia Corp.

"The CreditWatch Negative reflects our concerns about Citigroup's exposures to further losses on the market-disrupted assets and asset risk in its consumer loan portfolios in the U.S. Citigroup has about $100 billion of residential and commercial mortgage-related securities, leveraged loans, and auction-rate securities," S&P said in a statement. S&P said it expects to make a decision on the ratings within a month.

[kazataza]

i think its better to stay away from Citi at the moment...based on my working r/s wth them, their credit lines with other banks are running up dry and this may result them not able to run biz as per norm

[millionairemind]

Citigroup and Merrill make combined $8bn loss
Citigroup and Merrill Lynch laid bare the extent of the damage done by the continuing financial crisis to two of the world's largest banks, revealing combined quarterly losses of $8bn (£4.6bn)

By James Quinn, Wall Street Correspondent
Last Updated: 8:36PM BST 16 Oct 2008

In total the pair – reporting third-quarter results for the three months to September – announced more than $22.5bn of write-downs, losses and provisions.

Both banks have been hit hard by the credit crunch, having suffered under the weight of sub-prime mortgage investments and worsening credit quality.

Citigroup, which has managed to retain its independence in spite of more than $70bn of write-downs and credit costs over the last year or so, posted a net quarterly loss of $2.82bn, down from a $2.21bn profit in the same period last year, on more than $13bn of new write-downs and losses.

In spite of hopes from senior Citigroup management that the worst might be behind it, the bank continued to see problems across the board, with this set of results marking its fourth consecutive quarter of losses.

Not only is it seeing problems in its institutional business, which was expected given the credit crunch, but its consumer arms are also hurting, with consumer banking, its largest division, registering a $1.1bn loss on higher credit charges as customers begin to fall victim to the worsening economic outlook.

Citigroup's global credit card arm also saw losses – of $902m – on revenue down 40pc.

The bank, which is to receive $25bn in extra capital from the US Treasury under its plan to recapitalise major financial institutions, cut a further 11,000 jobs in the quarter, taking total losses year-to-date to 23,000.

At Merrill Lynch, which agreed to a take over by Bank of America last month at the height of the uncertainty surrounding the US banking sector, net losses for the three months to September totalled $5.15bn against $2.24bn last year, on $9.5bn of write-downs and charges.

Merrill blamed the loss, which was worse than analysts had expected, on the impact of the bankruptcy of Lehman Brothers on its business in addition to continued market volatility.

Merrill chief executive John Thain, who only took the job last December and was instrumental in driving the sale to BoA, said a shareholder vote to agree the takeover would be held in mid-November.

Meanwhile Morgan Stanley chairman and chief executive John Mack admitted in a television interview that the bank has now reduced its leveraged lending position from 31 times equity to 17 times, in part due to its recent investments from Mitsubishi UFJ and the US Treasury.

"There is too much leverage in the system. We all have to take some blame for that. Morgan Stanley was clearly leveraged along with our competitors," he admitted.

Speaking of the current financial crisis, he added: "I've never seen anything like this, anything close to this," before going on to raise the prospect of a new global financial regulator to potentially oversee the international equity and credit markets.

[blid2def]

http://www.reuters.com/article/ousiv/id ... dChannel=0

Excerpt:

Goldman Sachs recommends "sell" on Citigroup

(Reuters) - Goldman Sachs reinstated Citigroup Inc with a "sell" rating and recommended a "paired" trade in which investors sell Citigroup short, betting on a decline, and buy Morgan Stanley shares.

Shares of Citigroup, the giant U.S. bank, fell 5 percent to

$14.35, while those of Morgan Stanley rose 3 percent to $20.36 in morning trade on the New York Stock Exchange

"We believe weak economic data will keep the (Citigroup) stock under pressure over the next six months and it is tough to see why the stock would head higher over this period," analyst William Tanona wrote in a note to clients.

Adding Citigroup to Americas Conviction Sell list, Tanona said it will be difficult for the company to generate profitability over the next 12 months primarily due to additional write-downs and deteriorating credit market.

Even as Tanona expects government investment to help the company's overall capital position, he does not see Citigroup returning to profitability until the second half of 2009.

[kennynah]

I happen to think C will be an eventual kong term winner. But trade it now base on sentinment, of cos!!!

[millionairemind]

Citigroup (C) Won't Make It

By 24/7 Wall St.
Last update: 4:38 a.m. EDT Oct. 27, 2008Comments: 55
Citigroup (C) is not going to make it, at least not an an independent company. The FT has reported that the head of Goldman Sachs (GS) called Citigroup CEO Vikram Pandit to discuss a merger. Goldman had converted itself into a commercial bank. Maybe it was worried it would go the way of Morgan Stanley (MS). But, the Treasury has come up with capital for all the big financial firms, so the urge to do something has probably passed for the world's premier investment bank.
It is different for Citigroup. There things have gone from bad to worse.

Citigroup is not likely to make it as an independent company. It will not be a buyer. It will be sold.

If the bank's stock price and analysts covering the company are right, Citi's fate could be determined by the end of the year. Over the last month, shares in the bank are down by 40%. Rival JPMorgan (JPM) is off 2%. Wells Fargo (WFC) is up 10%. Citi's market cap is down to $66 billion. Bank of America's is nearly $100 billion.

In the last quarter Citi lost $2.8 billion, or $.60 per share, compared with a profit of $2.2 billion, or $.44, in the period a year ago. Revenue fell 23% to $16.7 billion

Bank analyst Meredith Whitney, who has been right more often than not on bank stocks, says that troubles in Citi's consumer group will drive up its losses more than expected. She cut her earnings estimates on the bank to a 2008 loss of $2.87 per share and a loss of $2.65 in 2009. Citi may not have the capital to cover those losses even with the government's cash injection.

What Whitney did not factor in just a week ago is that the credit crisis and signals of a recession have become much worse in a matter of days. Mortgage defaults are likely to rise more sharply then they have been as people lose jobs. The consumer's ability to pay his credit cards debt will deteriorate sharply. Citi's investment banking business is dead as a doornail. Most LBO loans are dropping in value as each week passes.

Citi will not report Q4 earnings for almost three months. It may run into awful trouble before that. The Fed and Treasury are going to have to find a merger candidate. Most likely that will be JP Morgan (JPM) because Bank of America (BAC) and Wells Fargo (WFC) are already digesting big acquisitions. Or, the government may turn around and take a majority stake in the money center bank the way it did with AIG (AIG) where it has already provided $90 billion in loans.
Vikram Pandit will have failed. It may take a little while for that to become absolutely clear, but Wall St. can take it to the bank. Or, maybe not.
Douglas A. McIntyre

[millionairemind]

Citi says credit card losses may rise through 2009
Bank suffers $1.4 billion hit from card-backed assets in latest quarter
By Greg Morcroft, MarketWatch

Last update: 1:44 p.m. EST Nov. 2, 2008Comments: 184

NEW YORK (MarketWatch) -- Citigroup said that it lost $1.4 billion in the third quarter from credit card securitizations and that it expects such losses will continue, possibly reaching record levels in 2009.

The result compared to a gain of $169 million from credit card securitizations in the year-earlier period.

"Credit card losses may continue to rise well into 2009, and it is possible that the company's loss rates may exceed their historical peaks," the banking giant said in its filing with the Securities and Exchange Commission late Friday.
Citi also said it added $3.9 billion to overall credit reserves, including $2.3 billion for its North American consumer business and $855 million for consumer business outside the U.S.

[kennynah]

ok...there's a thing about credit card defaults...

anyone who has held any plastics and did not pay up fully the expensed amount timely will know that the compounding interests and late charges add up to a hefty portion of the amount owing...

now, banks will calculate this as accounts receivables, hence assets.... but in reality....the credit given out can be significantly lesser than the actual amount owed...so, while we can expect credit losses to mount for banks...most of this money owed...is in fact....interests/late charges...which in the first place...are mocked up figures...though these contribute to the bottom line profit... these do not constitute as real losses to banks...if they should "look the other way"... afterall, if i had loaned u $100 with 24% interest pa...and if you default..what do i lose? $100, is it not?

hence, over time, i will not be surprised when banks will write off only the credit extended, but somehow creatively erase the "late charges/interests components" so as to minimize the default value....

tio boh ?

[financecaptain]

Not really. Any accrued default interest not collected will become receivables. Hence, if a loan is written off, the Bank will need to write-off any receivables associated with this loan. In addition, I do not think a bank can accrued any income derived from a suspense account.

In US, it is common for credit card debt to be securitised. Hence, the loss on Citibank's books so far is the marked-to-market losses on the securitized debt.