Citigroup: Financial Winners & Losers
(
Updated with monthly credit-card default data, TARP repayment approvals, final stock price moves
.)
NEW YORK (
) --
Citigroup
(C) - Get Report
was among the losers of Tuesday's session following reports it is planning a stock sale to help reduce the government's stake in the bank.
that is working on a plan to reduce the U.S. government's 34% stake, which includes a possible multibillion-dollar stock sale, while the Treasury Department would sell at least a portion of its Citigroup holdings, according to a report in
The Wall Street Journal
that cites people familiar with the matter. Citigroup executives plan to present the idea to the Treasury Department soon, the report added.
Bloomberg
reported that the Treasury Department aims to sell its 7.7 billion shares in Citigroup over the next six to eight months, and may begin unloading its stake as soon as October.
Separately, Citigroup will issue more debt backed by the Federal Deposit Insurance Corp. under the Temporary Liquidity Guarantee Program, according to IFR Markets. The amount has yet to be determined, but the bank is planning to sell a two-year and three-year debt under the TLGP.
While moving to rid itself of the stigma of being government-owned is a positive for the bank, the prospect of further dilution pressured shares of Citi ,which finished lower by 40 cents, or 8.9%, at $4.12.
Citigroup was also among a handful of companies reporting credit card metrics for August during Tuesday's session. Citi said its charge-off rate rose to 12.14% in August from 10.03% in July. Similarly,
Discover Financial
(DFS) - Get Report
,
Bank of America
(BAC) - Get Report
and
JPMorgan Chase
(JPM) - Get Report
reported increases in their respective charge-off rates.
BofA shares finished lower by 20 cents, or 1.2%, at $16.79, and JPMorgan shares lost 56 cents, or 1.3%, to $43.19. Discover, meanwhile, rose 11 cents, or 0.7%, to $15.14.
On the other hand,
Capital One Financial
(COF) - Get Report
said U.S. credit-card defaults declined in August. The credit-card company said annualized net charge-off rate for U.S. credit cards dropped to 9.32% last month from 9.83% in July. Still, Capital One shares lost 90 cents, or 2.4%, to $37.42.
Also,
American Express
(AXP) - Get Report
said the net write-off rate on a managed basis shrank to 9% in August from 9.2% in July and 9.9% in June. AmEx shares rose 73 cents, or 2.2%, to $34.65.
Regions Financial
(RF) - Get Report
was also among the winners after presenting at the Barclays Capital Global Financial Services Conference, saying that it will not need to raise additional capital and would like to pay back bailout funds from the Troubled Asset Relief Program as soon as Regions gains approval. Regions jumped 10.2% to close at $6.07.
In related news,
Reuters
reported that the U.S. government expects the next batch of big bank TARP approvals will come near the end of the year, according to a source.
Among other bank stocks,
Wells Fargo
(WFC) - Get Report
rose 2.4% to close at $28.58,
Goldman Sachs
(GS) - Get Report
was lower by 0.6% to $176.66, and
Morgan Stanley
(MS) - Get Report
dipped 0.1% to $28.74.
In other bank-specific news,
The Financial Times
that Chancellor of the Exchequer Alistair Darling is planning legislation this autumn to force British banks to draw up "living wills" so that they can be dismantled more easily in any future financial crisis.
The proposal to set out a timetable for banks to simplify their corporate structures and plan for dissolution will be included in a financial services bill in the Queen's speech in November, the report said.
Overseas banks were mixed on the news.
HSBC
(HBC)
advanced 0.7% to $55.50 and
Royal Bank of Scotland
(RBS) - Get Report
tacked on 1.7% to $18.74, while
Lloyds Banking Group
(LYG) - Get Report
slid 1.4% to $7.05 and
Barclays
(BCS) - Get Report
fell 1.1% to $24.56.
-- Written by Robert Holmes in New York
.
