Friday's Report from Citi Won't Be Pretty

From Bloomberg:

Citigroup Inc., the biggest U.S. bank, fell to the lowest level in New York trading since former Chairman and Chief Executive Officer Sanford Weill created the company through a merger in October 1998.

 Citigroup, which has lost almost half its value on the New York Stock Exchange this year, dropped 43 cents to $14.79 at 9:31 a.m., the lowest since Oct. 8, 1998, the day the New York-based bank was formed through the $36 billion combination of Travelers Group Inc. and Citicorp.

It’s rail on Citigroup (C) Day. It turns out the bank likes to keep a couple of assets “off the balance sheet.” By a couple, I mean $1.1 trillion.

When talking about Citigroup, it’s hard to explain how large this company is—and I think its size is part of the problem. Citi has 374,000 employees which isn’t much less than the size of Washington. Citi’s payroll, however, will be declining over the next few months.

According to Citi’s most recent balance sheet, the company has assets of $2.187 trillion, and liabilities of $2.087 trillion. That’s amazingly large, and that’s just the stuff on the books.

The company is due to report earnings on Friday and it won’t be pretty. The analysts are all over the map on this one, but the consensus is listed as -61 cents a share. I think taking the under is a pretty safe bet.

Six months ago, the company reported a loss of nearly $10 billion. Three months ago, Citi reported a loss of $5 billion.

Disclosure: None

Comments

[Bill Luce:]

Reed was a banker, Weill is a charlatan, Rubin is totally enchantded by W, Pandit is a non-entity who cannot reject W (or R). Until W's false paradigm is rejected and the bank split up it will go nowhere (except down).

2008 Jul 16 07:27 AM

[Emerald:]

This article provides no analysis and is therefore uselesss. Bill's comment is all emotional and serves no one. What may be said of Weill is that he picked someone who would not succeed (Prince) so he (Weill) could look like a master of the universe (a shrinking one at that!). It's time to look at a repeal of Glass Steigel as thid hasn't worked out too well. Citi is on the ropes through 2011, but for those who venture a gamble, this stock could have tremendous upside in 2012.

2008 Jul 16 12:33 PM

[je:]

iT IS SILLY TO TALK ABOUT 2012 WHEN THAT IS WHEN THE BOTTOM IN HOUSING "MIGHT" BE IN.

THE ONLY WAY TO KNOW WHAT THE BANKS HOLD IS TO HAVE THEM ALL REPORT THE SAME DAY. THEY ARE HIDING THE TRASH THEY HOLD AND THIS IS A SHELL GAME. HIDING BAD PAPER AND LOW EARNINS ESTIMATES. THE BANKS ARE BUSTED AND PEOPLE ARE STUPID. HOW CAN ANY COMPANY DILUTE ITS SHARES AND THEN SEE STOCK PRICES GO UP AS IF IT WAS GOOD NEWS.

2008 Jul 16 04:05 PM