Citi CEO: We've got enough capital
Company boosted capital by $30 billion, but analysts warn that multi-billion dollar writeoffs are on horizon.
NEW YORK (CNNMoney.com) -- Citigroup Inc. Chief Executive Vikram Pandit sought Wednesday to allay fears about his company's financial strength, a day after a Middle East investor said the Wall Street giant needs to raise more capital to survive.
In a letter to employees obtained by CNNMoney.com, Pandit said the bank is well-capitalized and "extremely focused" on the strength of its balance sheet. He noted that the bank received two rounds of financing in December and January, raising capital by more than $30 billion.
"The financing we secured is a vote of confidence in Citi, our future and you," he wrote.
Richard Bove with Punk Ziegel & Co. said in a report Wednesday that he expects the bank to take a $14.1 billion writeoff when it issues first-quarter earnings next month. He estimates Citigroup will report a quarterly loss of $1.42 a share, which slashes his 2008 earnings estimate to 50 cents a share, down from $2.16.
A day earlier, a Merrill Lynch analyst said he expects Citigroup to take a $15 billion writedown and to record a first-quarter loss of $1.66 a share, according to published reports.
Pandit, in his memo, said the bank is continuing to focus on how to improve the company's operations. As part of its continuing strategic review, the bank Wednesday said it was selling eight branches in the Texas Panhandle area to Happy State Bank & Trust. It is also planning to shed a total of 11 branches in Florida, New Jersey, California and Maryland.