Citi says credit card losses may rise through 2009
Bank suffers $1.4 billion hit from card-backed assets in latest quarterBy Greg Morcroft, MarketWatch
NEW YORK (MarketWatch) -- Citigroup said that it lost $1.4 billion in the third quarter from credit card securitizations and that it expects such losses will continue, possibly reaching record levels in 2009.
The result compared to a gain of $169 million from credit card securitizations in the year-earlier period.
"Credit card losses may continue to rise well into 2009, and it is possible that the company's loss rates may exceed their historical peaks," the banking giant said in its filing with the Securities and Exchange Commission late Friday.
Citi also said it added $3.9 billion to overall credit reserves, including $2.3 billion for its North American consumer business and $855 million for consumer business outside the U.S.
Citi said the additional reserve to the North American segment was mostly due to a weakening of leading credit indicators, including higher delinquencies on first mortgages, unsecured personal loans, credit cards and auto loans.
Citigroup's revealtion is just the latest news in a string of negative disclosures from the credit card industry. .......(more)
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