GO
Loading...

Citigroup CFO Warns of Big Potential Writedowns

Citigroup could take substantial write-downs for subprime mortgages, leveraged buyout loans and other assets in the second quarter, the company's chief financial officer said on a call with investors on Thursday.

Citigroup
Mark Lennihan
Citigroup

In at least some of these areas, the write-downs are on track to be smaller than the first quarter, but could still be substantial, CFO Gary Crittenden said.

Crittenden's disclosure, in a conference call sponsored by Deutsche Bank, sent Citi shares 4 percent lower, while rival banks Bank of America and JPMorgan Chase were down 4.4 percent and 3.3 percent, respectively.

Also in reaction to Crittenden's comments, Citi's debt protection costs rose.

Crittenden also said the bank could face another credit value adjustment similar to the last quarter from exposure to bond insurers.

In the first quarter, in which Citi posted a $5 billion loss, the bank took a $1.5 billion write-down for exposure to bond insurers.

Costs linked to worsening consumer credit quality could have a meaningful impact on Citi's results for the rest of the year, Crittenden said.

The company is always willing to look at acquisitions, and will make them where it makes sense, but is focusing more on improving its performance, he said.

Recently appointed Chief Executive Vikram Pandit has been trying to spearhead a revival at the bank, which has long underperformed its main rivals.

Symbol
Price
 
Change
%Change
BAC
---
C
---
JPM MLP ETN
---

Featured

Banks