Citigroup drops 22% to lead bank index to 13-year low

January 14, 2009 by · Leave a Comment
Filed under: Industry News 

Those retail numbers are really waking people up to the current situation.  Citigroup looks to be going under, we will see if we continue to support this over-sized and leverage financial institution.  I don’t see any real confidence coming back into our markets until we start letting these companies go bust and the free market take its course.  It would be positive to see those assets repriced and sold back into the markets.  With the $300+ billion dollars of government guarantees this out come looks doubtful.

News:

Citigroup Inc. and Huntington Bancshares Inc. led financial companies lower in New York trading, with the KBW Bank Index heading for the lowest close in more than 13 years.

Citigroup fell as much as 24 percent a day after agreeing to sell control of the Smith Barney brokerage to Morgan Stanley. Huntington, the third-largest bank based in Ohio, dropped 23 percent after its new chief executive officer said he may have to cut the Columbus-based company’s dividend or raise capital.

The worst financial crisis since the Great Depression has forced banks and finance companies to take more than $737 billion of writedowns and credit losses since the start of the credit contraction in 2007. Citigroup, once the biggest U.S. bank by assets, may sell off units including the CitiFinancial consumer-lending business and Tokyo-based Nikko Asset Management Co., people familiar with the matter said.

The 24-company KBW index, which includes the biggest U.S. national and regional banks, declined to 36.29 at 2:57 p.m., the lowest level since September 1995. None of the stocks tracked by the index, which fell as much as 6.3 percent, were higher.

Source: Bloomberg

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