Citigroup Inc. is likely to face another large mortgage-related write-down this quarter, according to a major investor and an analyst. Merrill Lynch & Co. analyst Guy Moszkowski said today in a note to clients he is forecasting another very large write-down of Citis subprime-related exposures because of continued deterioration in U.S. residential and commercial mortgage markets, corporate debt markets and key investment-banking categories.
Mr. Moszkowski, who estimated Citigroups additional write-down could be $15 billion on a $37 billion portfolio of subprime mortgage and CDOs, slashed his 2008 earnings forecast for the bank to 24 cents, down from a prior forecast of $2.74. Citigroup has already written down $20 billion since the subprime crisis started last summer.
Separately, Sameer Al Ansari, head of Dubai International Capital Group, reportedly said Citigroup will require a fresh cash injection, despite a $7.5 billion capital injection last fall from sovereign wealth funds in Abu Dhabi, and another $14.5 billion from investors that included sovereign wealth funds in Kuwait and Singapore.