Friday, April 4, 2008

Citigroup May Write Down Further $8.5 Billion, JPMorgan Says

Citigroup May Write Down Further $8.5 Billion, JPMorgan Says

By Sarah Jones

April 4 (Bloomberg) -- Citigroup Inc., the biggest U.S. bank by assets, may write down a further $8.5 billion in the first quarter largely on collateralized debt obligations and leveraged loans, JPMorgan Chase & Co. said.

``Rising credit losses, further sizeable loan loss reserve build and additional writedowns should continue to weigh on Citi's earnings,'' analysts including Vivek Juneja wrote in a note to investors today. ``We estimate further writedowns in first quarter 2008 of about $8 billion to $8.5 billion.

JPMorgan lowered its 2008 earnings-per-share estimate for Citigroup to $1.69 from $3.95. The brokerage said an increase in credit losses would be driven by home equity, subprime mortgages, other residential real estate-related lending and higher delinquencies in cards and auto loans.

Citigroup had a net loss of almost $10 billion in the fourth quarter because of subprime-mortgage writedowns.

BLOOMBERG

No comments:

Share |