There are fears across the global banking industry that Citigroup may have to cut its dividend or sell assets as a result of a shortage of capital. The fears have arisen following CIBC World Markets’ prediction that Citigroup will need to raise £15 million in capital either by cutting dividends or selling assets .
Citigroup, the world’s largest bank, has seen its share price drop by nearly 7% following the news. The bank endured a dismal third quarter as profit dropped by 57% as the bank was forced to write down £600 million given the current credit crisis.
Citigroup isn’t alone in its apparent current predicament, with fellow US banks Merrill Lynch and the Bank of America each reporting a £1.1 billion loss for the last quarter. Banks on the other side of the Atlantic have shared in the misery, with troubled mortgage lender Northern Rock forced to acquire £23 billion in emergency loans in the last six weeks.
World's Largest Bank Reportedly Short of Capital
World's Largest Bank Reportedly Short of Capital
Fri, 02 Nov 2007
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