US banks prepare for further writedowns

Citigroup to record another $11bn of losses, according to respected analyst.

Written by Alex Hawkes

Accountancy Age, 14 Apr 2008

US investment banks are poised to make further huge writedowns to their sub-prime related portfolios this week, as they report first quarter numbers.

Citigroup is expected to record a further $11bn (£5.6bn) of writedowns when it reports on Friday, according to one of the most influential analysts on Wall Street.

Meredith Whitney, the analyst whose bearish reports on Citigroup prompted death threats, said that she expected a writedown, which would be on top of $18 billion of writedowns in the third and fourth quarters, The Times reported.

Analysts also expect Merrill Lynch, which reports on Thursday, to take writedowns of around $5bn, while JPMorgan Chase is expected to take a $2.8 billion writedown when it announces its first-quarter results on Wednesday, the paper reported.