By ERIC DASH and JULIA WERDIGIER
Citigroup issued a profit warning today, estimating a 60 percent drop in third-quarter earnings because of write-downs for securities backed by subprime mortgages and loans tied to corporate takeovers.
Citigroup issued a profit warning today, estimating a 60 percent drop in third-quarter earnings because of write-downs for securities backed by subprime mortgages and loans tied to corporate takeovers.
Separately, UBS, Europe’s biggest bank, predicted an unexpected loss in the third quarter because of a $3.42 billion write-down for the value of mortgage-backed securities and announced a management shake-up.
Citigroup said it expects its third-quarter net income to fall to $2.2 billion from $5.51 billion in the period a year earlier as it books losses on loans related to leveraged buyouts, weak fixed-income trading results and the deterioration of complex mortgage-backed securities that contained bad subprime loans. It also said its consumer business would be hurt by higher credit costs.
NVDL: The housing bubble has been forgotten, but it is a dragon that is going to incinerate the world economy. The banks are starting to burn...
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