Could the biggest U.S. bank be on the verge of another cash call? The speculation is mounting after
Bloomberg reported that the head of Dubai International Capital LLC said the bank will need more capital from outside investors as losses from the collapse of the U.S. subprime mortgage market increase.
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In November, New York-based Citigroup Inc. sold $7.5 billion in equity to the Abu Dhabi Investment Authority and issued additional debt securities with capital benefits of about $4.3 billion. Then in January, the financial giant said it was getting another $14.5 billion from investors, including the governments of Singapore and Kuwait.
"It will take a lot more than that to rescue Citi and other financial institutions," Bloomberg quoted Sameer al-Ansari, the chief executive officer of Dubai International, as saying at a private equity conference in Dubai Tuesday. Dubai International is among the investment funds controlled by Dubai ruler Sheikh Mohammed bin Rashid al-Maktoum.
Citigroup, whose shares have lost 54% of their value in the last year, is scheduled to release its first-quarter results on April 15. The bank's fourth-quarter results included an $18.1 billion subprime related write-down, and analysts are forecasting further write-downs in the first quarter.
The speculation comes only days after Oppenheimer analyst Meredith Whitney suggested the bank's subprime problems may force it to sell Smith Barney Inc. - Peter Moreira and George White
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Recent sovereign wealth fund investments
The Wall Street firms raising capital |
| Company |
Sovereign wealth fund's country |
Amount
(bill) |
| Citigroup Inc. |
Abu Dhabi, Singapore, Kuwait, Prince Alwaleed bin Talal (Saudi Arabia) |
22.0 |
| Merrill Lynch & Co. |
Singapore, Kuwait, South Korea and Japan |
12.8 |
| UBS |
Singapore |
11.8 |
| Morgan Stanley |
China |
5.0 |
| Bear Stearns Cos. |
China |
1.0 |
|
Source: TheDeal.com |
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