| Goldman analyst predicts Citigroup will take $15 billion in writedowns
NEW YORK — Citigroup Inc.'s stock took another thumping Monday after Goldman Sachs estimated the bank will take as much as $15 billion in writedowns over the next two quarters and recommended selling the stock.
Goldman analyst William Tanona also said Citigroup may have to cut its dividend to save money.
When Citigroup CEO Charles Prince stepped down Nov. 4, Citigroup said it expected to write down $8 billion to $11 billion in the fourth quarter, following a writedown of more than $6 billion in the third quarter.
Executives said at the time that Citigroup would not lower its dividend, even though its cash-to-debt ratios have fallen. But they did warn that writedowns could be more extensive if the credit markets worsen.
Citigroup fell $2, or 5.9 percent, to close at $32 Monday, near the bottom of its 52-week range of $31.05 to $57.
Developing Stories
On the city-making circuit this fall, something feels different. At events organized to address how Austin can best develop and grow – whether convened by the business sector, community nonprofits, or the city of Austin – what's notable are the converging lines of conversation. Across old bipartisan and enemy-camp lines, advocates are coming together to craft workable solutions to specific community problems. Instead of draining their energies sparring, divergent groups are collaborating productively to get good things done. It's far from a perfect world, of course – plenty of adversarial battles rage – yet the noticeable migration to common ground is heartening. Approaching Zero Take the Zero Energy Capable Homes Task Force. Its mission: requiring homes so energy-efficient (consuming about 65% less energy than the average new home today) that, with the addition of solar panels, they could in principle consume zero energy.
(AFX UK Focus) 2007-11-19 12:00 GMT: Northern Rock's bank financial strength cut to 'd+'; outlook negative - Moody's
MUMBAI (Thomson Financial) - Moody's Investors Services downgraded Northern Rock PLC's bank financial strength rating (BFSR) to 'D+' with a negative outlook from 'C-' with a developing outlook. It said the 'D+' maps into a Baseline Credit Assessment of 'Ba1'. Moody's said that the downgrade of the bank's BFSR reflects the more significant impairment of the bank's franchise as the effort to find a corporate solution has proven more protracted than initially expected. The rating agency said it sees the likelihood of a swift sale of the bank to a large and highly rated financial institution to be possible but less likely than initially anticipated. The downgrade also reflects its view on the bank's future profitability as a result of its increased cost of funding, expected lower levels of new business and possible restructuring costs.
Further losses to hit UBS
UBS raised the prospect of further writedowns to its big holdings of securities exposed to the US housing and mortgage industries. While the bank moved to allay fears that losses for the third quarter, to be revealed today, could be worse than the SFr600-800 million ($566-$754 million) indicated this month, it cautioned on the outlook for the fourth quarter. The bank said its fixed-income business "remains exposed to further deterioration in the US housing and mortgage markets as well as rating downgrades for mortgage-related securities, which could lead to further writedowns on the positions". The bank attempted to reassure investors by saying the current quarter had begun "with good results". However, it added that because of the continuing uncertainties, "UBS is not assuming that the quarter will continue as positively as it has begun, or that current difficulties will be resolved in the short term".
National Bank warns of $575 million ABCP charge in Q4 results
MONTREAL - Joining a long list of banks hurt by the collapse of the U.S. subprime mortgage market and the credit crunch, National Bank (TSX:NA), Canada"s sixth-largest bank, plans to take a $575-million charge in the fourth quarter to account for losses in its non-bank asset-backed commercial paper. The after-tax writedown amounts to about $365 million after tax and compensation adjustments, the Montreal-based bank said. During the quarter, which ended Oct. 31, National said it bought $2.1 billion worth of ABCP, mostly from its own mutual funds and commercial paper held by its retail clients, on top of about $150 million it already held. The Montreal-based bank, prominent among a number of Canadian financial institutions that formed a committee striving to rehabilitate $35 billion of short-term debt, was expected to take the charge.
Ahead of the Bell: Citigroup Downgraded
Shares of Citigroup Inc. inched lower in premarket trading Tuesday after a Banc of America analyst became the latest on Wall Street to downgrade the embattled bank. Analyst John E. McDonald cut his rating on the New York-based Citigroup to "Neutral," from "Buy," and cut his price target on the shares to $39 from $45. .
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