Citigroup 'may need more outside cash'

Citigroup Inc, the biggest US bank, may need additional capital from outside investors as losses stemming from the collapse of the US subprime mortgage market increase, the head of Dubai International Capital said.

Citigroup received $7.5 billion in November from Dubai's neighbor, Abu Dhabi, after record mortgage losses wiped out almost half the company's market value and led to the departure of Chief Executive Officer Charles Prince. The New York-based company said in January it was getting another $14.5 billion from investors, including the governments of Singapore and Kuwait.

"In my view, it will take a lot more than that to rescue Citi and other financial institutions," said Sameer al-Ansari, who helps run Dubai International, at a private-equity conference in Dubai yesterday. Dubai International is among the investment funds controlled by Dubai ruler Sheikh Mohammed bin Rashid al-Maktoum.

Citigroup probably will report a first-quarter loss of $1.66 a share after $15 billion of mortgage-related writedowns, Merrill Lynch & Co analyst Guy Moszkowski said in a report issued yesterday. The company also may have $3 billion of markdowns from loans used to finance leveraged buyouts and commercial real estate, Moszkowski estimates.

Agencies

(China Daily 03/05/2008 page16)