Citigroup and other banks are concerned that their loans may not have enough collateral in the form of copper and aluminum stockpiles at the port, according to the New York Times. The banks dispatched inspectors to the site to determine if enough of the materials are there.
The fear comes from suspicions that a Chinese company promised the same collateral for multiple loans. Chinese officials are investigating the issue, which could have an affect on the commodities market and the Chinese economy. Banks have poured billions of dollars into the Chinese economy through these types of transactions, according to the article, and commodities prices have been declining amid concerns that such lending would slow.
The stock was down 1.06% to $48.80 at 12:22 p.m.
Separately, TheStreet Ratings team rates CITIGROUP INC as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate CITIGROUP INC (C) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, expanding profit margins, increase in net income and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow."