Citi CEO to Quit: Report
Updated from 5:15 p.m. EDT
Citigroup's
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embattled CEO Chuck Prince will resign at a board meeting on Sunday, according to
The Wall Street Journal
, citing people familiar with the situation.
Earlier Friday, the
Journal
reported a board meeting would take place this weekend, according to sources, to possibly discuss both Prince's status and further writedowns on bad mortgage paper. A Citi spokeswoman declined to comment.
Citi shares dropped 2% Friday amid worries about possible writedowns at Wall Street banks such as
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Merrill Lynch
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and
Goldman Sachs
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. Citi's selloff came on top of Thursday's 7% plunge, caused by a CIBC downgrade tied to the bank's capital levels. Friday's decline came despite market chatter that Prince had canceled a speech he was to give at a U.S.-Japan business conference in Washington on Sunday -- possibly suggesting to investors that he's on his way out.
Prince would not be the first executive casualty of the credit crunch. Merrill Lynch's Stan O'Neal stepped down earlier this week after the firm took a staggering $8.4 billion writedown in the third quarter.
Citi reported nearly $6 billion in writedowns in the third quarter as a result of its exposure to leveraged loan commitments, subprime mortgages and fixed-income trading. Citi's total credit costs jumped by $3 billion, as the bank recognized $780 million in credit losses and took a net charge of $2.24 billion to increase loan-loss reserves.
The news comes as analysts say that the bank could take more writedowns in the fourth quarter and have to raise its capital levels. Deutsche Bank analyst Mike Mayo estimates that Citi could take up to $4 billion in added writedowns, according to a note Friday.
Shares rose 75 cents to $38.48 after the market closed.
