This just in from the Guardian (UK) --
Citigroup in shock profit warning
Graeme Wearden
Monday October 1, 2007
Guardian Unlimited
Citigroup shocked investors today with a profits warning after losing billions of dollars in the recent global financial turmoil. Its grim warning came just hours after UBS announced its own substantial losses in the US sub-prime mortgage crisis.
The bank, which is one of the world's most prestigious financial institutions, revealed that net profits in the third quarter of 2007 have nose-dived by 60%.
It blamed "dislocations" in the mortgage-backed securities and credit markets, and also said that its losses from consumer credit have increased.
Article continues
Charles "Chuck" Prince, chairman and chief executive of the group, admitted that the results were "a clear disappointment".
Citigroup lost $1.3bn (£638m) through securities backed by sub-prime mortgages – loans made to people with poor credit histories who may struggle to pay them off.
It has also written off $1.4bn of highly leveraged loans, and lost a further $600m through trading during the recent market turmoil. As a result, third-quarter profits will be 60% lower than the previous quarter.
Citigroup's profits warning came just hours after UBS announced 1,500 job cuts and a shake-up of top management, after making a large loss on its own sub-prime investments. The Swiss company has written down £1.3bn worth of sub-prime assets, and has made its first quarterly loss in nine years.
Just three months ago, Mr Prince denied that the financial industry had stoked up trouble through reckless borrowing and excessive risk-taking.
- Guardian/UK: "Citigroup in shock profit warning"
-- Dan Damon
View today's CLIPS here. Not getting your own CLIPS email daily? Click here to subscribe.
ARCHIVED POSTS OF PLAINFIELD TODAY FROM 11/03/2005 THROUGH 12/31/2006 ARE AT
http://plainfieldtoday.blogspot.com/
http://plainfieldtoday.blogspot.com/
Posts
0 comments:
Post a Comment