Tuesday, March 04, 2008

Citigroup: The End?

Here's a history of Citicorp--now scratching for cash.

Citigroup shares sank about 5 percent to their lowest level in more than nine years, as stockholders recoiled at forecasts of more losses at the troubled bank and comments from a Middle East investor that Citi must raise more cash to stay in business.

Samir al-Ansari, chief executive of the $13 billion government-owned investment firm Dubai International Capital, said at a private equity conference that it will take more than the combined efforts of the Gulf's wealthiest investors — the Abu Dhabi Investment Authority, the Kuwait Investment Authority and Saudi Prince Alwaleed bin Talal — to save Citigroup.
The reason is that Citi is likely to suffer additional losses due to defaulting credit. Having already written down $18 billion in bad mortgage-related debt in the fourth quarter, Merrill Lynch analysts predicted that Citi will have to write down another $18 billion in the first quarter, according to Dow Jones Newswires.

Citigroup was (back when) the First National City Bank, and invented MasterCard (to compete with Bank of America's Visa Card.) During the 1960's it was run by the legendary Walt Wriston, and was on good terms with a couple of Milwaukee-area banks as a correspondent.

You can expect some interesting things to emanate from Washington if Citi gets desparate.

1 comment:

3rd way said...

The biggest bank in the world is going to be owned by a foreign government. Stupendous.