Citigroup Inc., the largest US financial institution, warned Monday its third-quarter earnings are likely to decline 60% due to mortgage and loan losses.
It has taken more than $3 billion in write-downs for securities backed by underperforming mortgages and loans tied to corporate buyouts, said Citigroup in an announcement. Citigroup will write down about $1.4 billion on funded and unfunded loan commitments when it announces its Q3 results. It will also record a loss of $600 million in fixed-income credit trading due to market volatility.
Third quarter global consumer credit costs also increased $2.6 billion from the same quarter a year ago, the company said.
The warning came after Swiss bank UBS AG said it will post a loss of up to $690 million in the Q3 partly due to losses linked to US subprime mortgages. (people.com.cn)