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A major global bank has declared the full extent of the damage caused by the international credit crisis
http://money.uk.msn.com/investing/ar...mentid=6291917
News has emerged that Citigroup has suffered £2.93 billion of writedowns and losses due to the credit crunch. The expected 60% fall in third-quarter earnings has prompted some to call for the resignation of Citigroup chief executive Chuck Prince.
In July, while it was becoming apparent that liquid capital was drying up in the money markets, Price said to the Financial Times: "When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you've got to get up and dance. We're still dancing."
The remark drew fire as bankers were belatedly starting to be more risk-averse.
The extent of the writedown has not yet affected Citigroup's share price, which was up 2.43% at the close of trading yesterday. Various stock market analysts have said that Citigroup's expected £2 billion profits will help sustain the company's share price.
More banks are expected to report this summer's financial difficulties in their quarterly reports.
Credit Suisse and UBS have already reported on the damage caused by the liquidity crisis in the markets. Both investment banks issued profit warnings, though their share prices recovered as traders hoped that the full damage has now been quantified and mitigated.
UBS confirmed it would post pre-tax losses between £250 million and £334 million. The losses are expected to lead to 1,500 job cuts in London and New York.
Credit Suisse are expected announce a profit warning of £543 million for the third quarter and analysts expect a similar warning from Deutsche Bank.
The latest news may put a further squeeze on corporate borrowing, which is now being offered under strict conditions.
On the other hand, consumer lending is likely to remain unchanged. The Bank of England's recent report on credit conditions found that the availability of secured credit to households was unchanged over the three months to mid-September. "Despite recent turbulence in financial markets, they expected the availability of secured credit to remain largely unchanged over the next three months," the report said.
http://money.uk.msn.com/investing/ar...mentid=6291917
News has emerged that Citigroup has suffered £2.93 billion of writedowns and losses due to the credit crunch. The expected 60% fall in third-quarter earnings has prompted some to call for the resignation of Citigroup chief executive Chuck Prince.
In July, while it was becoming apparent that liquid capital was drying up in the money markets, Price said to the Financial Times: "When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you've got to get up and dance. We're still dancing."
The remark drew fire as bankers were belatedly starting to be more risk-averse.
The extent of the writedown has not yet affected Citigroup's share price, which was up 2.43% at the close of trading yesterday. Various stock market analysts have said that Citigroup's expected £2 billion profits will help sustain the company's share price.
More banks are expected to report this summer's financial difficulties in their quarterly reports.
Credit Suisse and UBS have already reported on the damage caused by the liquidity crisis in the markets. Both investment banks issued profit warnings, though their share prices recovered as traders hoped that the full damage has now been quantified and mitigated.
UBS confirmed it would post pre-tax losses between £250 million and £334 million. The losses are expected to lead to 1,500 job cuts in London and New York.
Credit Suisse are expected announce a profit warning of £543 million for the third quarter and analysts expect a similar warning from Deutsche Bank.
The latest news may put a further squeeze on corporate borrowing, which is now being offered under strict conditions.
On the other hand, consumer lending is likely to remain unchanged. The Bank of England's recent report on credit conditions found that the availability of secured credit to households was unchanged over the three months to mid-September. "Despite recent turbulence in financial markets, they expected the availability of secured credit to remain largely unchanged over the next three months," the report said.
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