Citigroup losses could cast wider net
TEXT OF STORY
Doug Krizner: Charles Prince is out as CEO of Citigroup.
This follows an emergency meeting yesterday of Citi’s board. Fallout from the subprime fiasco is the reason. Head of Citi’s European operations, Sir Win Bischoff, will be named interim chief executive, and former Treasury Secretary and senior Citi adviser Robert Rubin will become chairman.
News of this shakeup has roiled European stock markets this morning. From London, Stephen Beard reports.
Stephen Beard: Charles Prince’s departure was expected, but investors here have been shocked by Citigroup’s latest subprime losses.
On Sunday, it emerged the bank will have to write-off between $8 [billion] and $11 billion. That’s in addition to the $5.9 billion it wrote off in the third quarter. British bank shares fell by up to 4 percent this morning.
Analyst Mark Durling says following Citigroup’s revelations, investors are scared bad news from British banks could be around the corner:
Mark Durling: It’s uncertainty, which is leading to fear, which is leading to the share-price corrections that are coming through. Which are probably overdone, but until we see that disclosure, that trend is likely to continue in the short-term.
Meanwhile, Citigroup shares — listed on the Tokyo stock market — rose today by almost 6 percent. Some investors apparently believe that the world’s biggest bank could now be broken up, and its valuable assets sold off.
In London, this is Stephen Beard for Marketplace.
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