Citigroup to Take $16 Billion Writedown, Merrill Says

[marmar]

from Bloomberg:



Citigroup to Take $16 Billion Writedown, Merrill Says (Update1)

By Edward Evans

Jan. 8 (Bloomberg) -- Citigroup Inc., the biggest U.S. bank, may be forced to write down $16 billion in the fourth quarter and post a larger loss than previously estimated, Merrill Lynch & Co. analyst Guy Moszkowski said.

Moszkowski almost doubled his estimate for Citigroup's loss to $1.43 a share from 73 cents, he wrote in a note to clients today. Moszkowski, the top-rated U.S. bank analyst according to Institutional Investor magazine, maintained his ``neutral'' rating on the New York-based bank.

Sanford C. Bernstein & Co. and Goldman Sachs Group Inc. have also cut their estimates for Citigroup on concern the bank will mark down some of its $55 billion of subprime and collateralized debt obligation holdings. U.S. subprime-mortgage defaults have forced financial institutions to announce at least $100 billion of asset writedowns and losses on bad loans.

Writedowns at Bear Stearns Cos. and Lehman Brothers Holdings Inc., whose fiscal year ends a month earlier than Citigroup in November, suggest ``substantial deterioration in the value of the underlying securities'' as well as the failure of some hedging strategies, Moszkowski wrote. ``Further, overall fixed-income trading results were abysmal at all most November year-end firms and likely worsened in December,'' he wrote. ......(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=aqYaLg9W6sv8&refer=home