Citi Faces $8B More in Writedowns: Analyst
Among U.S. banks, Citi and Merrill Lynch have been at the forefront of the credit crisis, which began little more than a year ago, because of their large exposure to CDOs. Both financial titans ousted their CEOs last fall and have had to raise billions in capital.
Merrill also plans to raise $8.5 billion in capital through the issuance of common stock, among other things. Temasek Holdings, which has already provided capital for Merrill, has agreed to purchase $3.4 billion in the offering, the firm said. In the second quarter, Citi posted its third consecutive loss of $2.5 billion, or 54 cents a share. The loss was driven by $6.7 billion in writedowns related to the bank's exposure to subprime, downgraded bond insurers, commercial real estate and alt-A mortgages. Merrill posted its fourth loss in a row of $4.7 billion, or $4.97 a share, two weeks ago, amid $9.4 billion in writedowns and impairment charges. Shares of Citi were most recently down 1%, while Merrill shares fell 5%.- Loading Comments...
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