The Associated Press reports that Citigroup Inc. (NYSE: C) is taking a big write-down due to its subprime holdings. But the write-down may not be as bad as people thought, nor did it raise as much capital as had been reported.
Here are some of the highlights:
- $18.1 billion in subprime-related costs (write-downs as high as $24 billion had been reported by CNBC)
- $12.5 billion investment from outside investors ($20 billion was estimated this morning)
- 41% dividend cut
Citigroup posted a net loss of $9.83 billion, or a loss of $1.99 a share, compared with a profit of $5.13 billion, or $1.03 a year earlier. This was roughly double the 97 cent a share loss analysts had anticipated.
Update: A new report suggests Citi will seek to raise $14,5 billion -- $2 billion more than previously reported. My interpretation is that is has $12.5 billion "in the bag" and is seeking $2 billion more. It also reduced its assets 7.4% to $176 billion to maintain the ratio of equity to assets that bank regulators require.
I plan to liveblog Citi's conference call which begins at 8:30 am.
Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He owns Citigroup shares.
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