Late last week Citibank warned the markets that more big writedowns were expected in quarter 2. They are also looking at more credit losses in the face of what they called unprecedented conditions in the market.
Following the announcement shares on the NYSE fell by over 4 percent, recovering by the end of trading though still down 1 percent. The markets have already seen disappointing results from other major financial players, leading many to feel that the credit crunch is going to hurt companies for some time to come. Citibank made a lot of their money in the sub-prime lending market so have been hit hard by the meltdown in this area.
As well as the mortgage difficulties they experienced Citibank are now seeing the credit crunch hitting their credit card arm too, with business really slowing down as consumers feel the need to rein in their spending.
Long standing Citigroup executive is leaving the organization, of which Citibank is a major part, after 23 years with the organization. The move is seen to be part of the business transformation being led by new CEO Vikram Pandit.
Citibank and parent Citigroup have been well looked after by Mr Klein, who was a key part of the management team, using his influence to secure multi-billion dollar investments from overseas. These investments were instrumental in keeping the company in the game as they suffered at the hands of the US credit crisis.
The move is amicable it is understood, with many people expecting it since Mr Klein was moved away from running the day to day operations of Citibank. It is expected that, like others recently, Mr Klein will probably head up a different financial organization, especially with the contacts and experience the 44 year old can bring.
The investment management team at Legal and General are anticipating recession in the UK as early as this year.
The economic indicators the Legal and General people are looking at are highlighting an imminent recession. These indicators include the level of borrowing, reduced spending and the relative inability to access extra funds. In combination these factors are really making the British public take notice of the economy and consider their own positions.
Further driving the problem is the fact that the global economy is struggling, so it is not an isolated UK issue. Consumers in the UK are keeping a wary eye on the situation says Legal and General, which automatically means they are less free with their spending and tend to be much more conservative in their decisions.
