Citi Pulls A Merrill – CEO Prince Steps Down
“We estimate that there’s over $10 billion of write downs in the fourth quarter for the industry for banks and brokers.”
– Mike Mayo (subscription required), Brokerage Analyst, Deutsche Bank
Yesterday Citigroup (C) announced that CEO Chuck Prince will step down (Press Release) and that the value of their mortgage backed security holdings has decreased an additional $8 to $11 billion since Sept. 30 (Press Release) in which they had already taken a $1.83 billion writedown related to mortgage backed securities and CLOs (Citi 3Q Earnings Release).
Markets were down almost 100 points at the very start of the session but seem to be recovering a bit now. Same for Citi which is currently down about 3%.
Sources:
“In Citi Shake-Up, Broader Troubles” (subscription required), The Wall Street Journal, A1, Monday November 5
“Why Citi Struggles to Tally Losses” (subscription required), The Wall Street Journal, C1, Monday November 5