Monday's writedown festival has renewed calls for change atop Citi ( C).

Citi shares rose 3% Monday in spite of a sobering third-quarter earnings forecast issued before the market opened. Citi predicted a 60% drop in third-quarter profits, due in large measure to a $3.3 billion hit tied to writedowns in mortgage securities and leveraged buyout debt.

Mike Mayo, an analyst at Deutsche Bank, attributes the rise to a sense among investors that the latest pratfall will eventually lead to the ouster of CEO Chuck Prince. Prince has been under the gun for more than a year, and the bank's weak performance in the third quarter won't help make Prince's case with a restless Wall Street, the analyst says.

Citi has been a "dramatic underperformer from a stock standpoint," says Mayo, who has a buy rating on the stock. "There has been a series of operational shortfalls, a few bad management decisions and ... writedowns in the same quarter when the CEO said the private equity environment is fine. If not now, in this particular case, then when?"

Over the past few years, Citi stock has lagged behind its peers Bank of America ( BAC) and JPMorgan Chase ( JPM), as expenses rose and revenue stagnated.

The stock rallied late last year amid talk that Citi was planning a big management shake-up or a major change in strategy. But none was forthcoming. Instead, Prince named Robert Druskin chief operating officer and put him in charge of a review process that culminated in April with 17,000 firings.

Prince promised the cuts would lead to better performance, but so far he has been unable to deliver the goods.

Citi said Monday that its losses will include $1.4 billion of writedowns on funded and unfunded highly leveraged finance commitments, and $1.3 billion worth of losses on the value of subprime mortgage-backed securities warehoused for future collateralized debt obligation and other structured securities, it said. The company will also take losses of $600 million pretax in fixed income credit trading due to significant market volatility and the disruption of historical pricing relationships.

Citi also said credit costs rose by $2.6 billion from a year ago in the latest quarter in its global consumer business, due largely to larger loan loss reserves.

Citi was "hit on every level," says Tim Ghriskey, co-founder of The Solaris Group and head of its asset management arm. "The broad scope of the hit is more a reflection of management than anything else."

A spokeswoman for Citi declined to comment, but investors including Ghriskey -- whose firm doesn't own the stock -- expect to see change soon.

"We've seen some of the Street out there calling for his resignation or his replacement," Ghriskey says of Prince. "We've put it at an even chance one way or the other by the end of the year that there will be a decision."

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