Citigroup: CITI Plunge before making deal

As a concern about Citigroup bank's balance sheet and its fourth-quarter results, its shares fell. This is a concerns because Citigroup was close to selling a stake in its Smith Barney retail brokerage to Morgan Stanley when this unfolded.

Citigroup is close to a deal to unload $12B of its debt. Citigroup is expected to cut the remaining 25,000 jobs by the first half of 2009. It is also facing mounting losses from its mortgage, credit card portfolio and will likely need to raise additional capital. Citigroup is trying to return to profitability by selling off assets and implementing a number of cost cutting initiatives. Citigroup is one of the most diversified financial services company in the world.

CitiBank

A man walks past a CitiBank branch on the Avenue of the Americas in New York, November 17, 2008. REUTERS/Brendan McDermid

Citigroup shares closed down $1.15, or 17 percent, to $5.60 on the New York Stock Exchange, bringing the company's market value down to $30.5 billion. The shares hit their lowest level since November 24, a day after the company received a $20 billion capital infusion from the U.S. government.

JPMorgan Chase & Co and Bank of America Corp shares also dropped on concerns about their credit problems.

Citigroup is essentially a two company conglomerate, Consumer Bank and Institutional Bank and should be run as such. Citigroup nears deal The landscape of the banking industry continues to shift as Citigroup is said to be close to a deal with Morgan Stanley.

You are here:HomeFinanceCitigroup is a classic example of how fear can undermine an institution City comment. The headline should read "Citigroup is a classic example of how insolvancy can undermine an institution". You are here:HomeFinanceNews by SectorBanks and FinanceCitigroup is latest bank to battle for survival.

With the government behind it, Citigroup may now be able to borrow money in the capital markets at lower interest rates than its peers.

Stock

stocks finish at 2009 lows amid earnings jittersCitigroup may be broken up, under government influenceOil falls 8%, down for fifth sessionCiti hits almost 15-year low, falling 17%Crude super contango puts more oil in storage, signals price riseSatyam soars in India as new board members appointedTwo survivors of Crash of 2008 see better times aheadSave money by rethinking your TV, Internet and phone needsCiti may get $2. The $25 billion perpetual preferred stock issuance to the Treasury has certainly improved Citigroup's Tier 1 capital adequacy ratio.

Given hundreds of other Banks in the world, I see CITIGROUP as the best, most promising Bank, CITIGROUP (NYSE: C) stock price is very small but could be a very big stock price. Prior to the Citigroup rescue, Washington's largest commitment of fundsto an individual company was its promise to buy as much as $200 billionof special stock in mortgage giants Fannie Mae and Freddie Mac. So far, Citigroup hasn't gotten much of a boost in the stock market, based on a comparison with Reed's ''synthetic'' Citigroup model.

Like other financial companies, Citi's stock also has rebounded from the lows of last fall, rising from 32 1/2 on Oct. The resulting plan scaled back Citicorp's benefits and relies more on stock options, while cutting costs in the short term.

Citigroup nears dealThe landscape of the banking industry continues to shift as Citigroup is said to be close to a deal with Morga. The incorporation of default risk into loan yields by Citigroup is certainly logical, even overdue; and that logic is supported by the extensive loan-loss provisions Citigroup made in its latest financial disclosure.

While the Super-SIV bailout has already failed, Citigroup is so over-leveraged it can't bring those assets onto its balance sheet. The stock market is saying in effect that Citigroup is insolvent. " The deal in Citigroup is the latest in a string of high profile investments in global companies by UAE institutions.