Citigroup Sees Sharp Loss
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Citing large losses in mortgage-backed securities and credit markets, Citigroup Inc. said today it is expecting a decline of 60% in its third quarter compared to the same period last year. The bank will officially release its third quarter results on October 15.
Citi said it expects write-downs of $1.4 billion in credit markets and $1.3 billion in securities backed by subprime mortgages and leverage-buyout loans. It is also predicting loses of about $600 million in fixed income credit trading due to significant market volatility.
“Our expected third quarter results are a clear disappointment,” Citi’s chairman and CEO, Charles Prince, said in a statement.
An industry-wide subprime mortgage crisis has affected most of the major banks and is threatening to drag the American economy into recession.
Citi is America’s largest bank based on its market capitalization and employs more than 25,000 in New York City.
