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Tuesday, July 29, 2008

Round II: Citi Write Downs to Date

Yesterday, we took a look at where Merrill stood to date with write-downs, and with a recent forecast of another $8 Billion more to come from Citi, I thought it was only appropriate to look in their direction (for the record the huge interest in yesterday's entry makes the contrarian investor in me think I have to put some money to use on the long side...)

I again searched all over the web, but was unable to find a cumulative total of write-downs to date for Citi (except here as of 1/18/08, BUT the numbers are flat out wrong - Citi had already hit $28B at this point).

So... below is my attempt to piece together what I calculated at ~$54B (thanks for the tip Nicholas!) based upon statements directly from Citi (linked to below). Again, please let me know where I may have gone awry.
Click to see larger chart:

October 1st, 2007: $5.9B (Pre-release): "Our fixed income trading business has a long history of earnings power and success, as shown in this year's record first half results. In September, this business performed at more normalized levels and we see this quarter's overall poor trading performance as an aberration. While we cannot predict market conditions or other unforeseeable events that may affect our businesses, we expect to return to a normal earnings environment in the fourth quarter," said Prince.

October 15th, 2007 (Earnings date): "As we move into the fourth quarter, we are focusing closely on improving those areas where we performed below expectation, while at the same time continuing to execute on our strategic priorities," said Prince.

November 5th 2007: $8-11B (in chart as $9.5): Citigroup Inc. (NYSE: C) announced today significant declines since September 30, 2007 in the fair value of the approximately $55 billion in U.S. sub-prime related direct exposures in its Securities and Banking (S&B) business. Citi estimates that, at the present time, the reduction in revenues attributable to these declines ranges from approximately $8 billion to $11 billion

January 15th, 2008: $12.9B: "Citi's fourth-quarter results are unacceptable," said Vikram Pandit, recently named chief executive of the company, which is the largest U.S. bank by assets. "We need to do better, and we will do better," he said in a conference call with investors and analysts.

April 18th, 2008: $12.1B: The bank sees "strong momentum throughout the organization. To start with, we're not happy with our financial results this quarter, although they're not completely unexpected given the assets we hold," Pandit later said on the conference call.

July 18th: $7.2B: "We continue to demonstrate strength in our core franchise. We cut our second quarter losses in half compared to the first quarter. The cost of credit increased by 20% from the first quarter, but write-downs in our Securities and Banking business dropped by 42%. " said Vikram Pandit, Chief Executive Officer of Citi.