CIBC

How big will Citigroup's 4Q writedown be?

Wed, 09 Jan 2008 06:59:56 -0500

At times like these, an analyst can really make a name for himself or herself. Meredith Whitney, of CIBC, has certainly seized the day. The issue du jour is how much Citigroup will write down for the fourth quarter. The bank reports next week, and according to the Financial Times, Merrill Lynch has weighed in with a prediction of $16 billion, Goldman Sachs says $19 billion, and Sanford Bernstein is looking for a $12 billion loss. Citigroup itself was hoping to limit writedown to no more than $11 billion. Regardless of the amount, a loss is a virtual lock. No matter how big, there are clearly some troubling issues at play. Goldman Sachs analyst William Tanona notes that the assets showing the biggest losses are the so-called super senior assets. This would have been shocking not too long ago.

For more:
- here's the Financial Times item

C&L: Tom Woods tapped as chief risk officer at CIBC

Wed, 09 Jan 2008 06:59:51 -0500

> Tom Woods tapped as chief risk officer at CIBC
> Michael Ho rejoins Mellon
> Bear Stearns taps Richard Allen and David Kahn for public finance.
> Citi Capital Strategies hires Gregory Rush for Boston office
> M.D. Sass hires Daniel Fishbane
> Jonathan Chenevix-Trench steps down at Morgan Stanley. Article

ALSO NOTED: New ad campaign for JPMorgan Chase; Thain to bring Goldman exec abroad?; and much more...

Wed, 09 Jan 2008 06:59:50 -0500

Company News:
> New ad campaign for JPMorgan Chase. Article
> Citigroup combines mortgage operations. Article
> Thain to bring Goldman exec abroad? Article
> More on Morgan Stanley's sovereign wealth play. Article
> CIBC shakes up exec suite. Article
> Jefferies execs forgo bonuses. Article
> JPMorgan Chase & Co buys stake in BATS. Article

Industry News:
> Exchanges to fragment or consolidate? Article
> Gold price hit record high. Article

Finally... How to motivate employees. Article

ALSO NOTED: $2 billion writedown for CIBC; Goldman Sachs is the top advisor in Europe; and much more...

Tue, 18 Dec 2007 06:59:50 -0500

Company News:
>Goldman Sachs is the top advisor in Europe. Article
> $2 billion writedown for CIBC. Article
> Nomura denies bid for Collins Stewart. Article
> Morningstar to acquire Hemscott units. Article
> Valueline profits rise. Article

Industry News:
> SPACs looking like a better idea? Article
> CalPERS invests $200 million in commercial mortgage fund. Article
> Exchanges benefit from volatility. Article
> More on investment bank earnings. Article
> VAR really all that helpful? Article
> What's up for bond insurers? Article

And Finally... More on office party etiquette. Talking about business okay? Money? Article

How things change: Analysts applaud Pandit

Mon, 17 Dec 2007 06:59:57 -0500

Well, the reception of Vikram Pandit was initially rather tepid. Meredith Whitney, of CIBC, deemed his first meeting with analysts uninspired. But he recovered with brio and had a surprising first three days, the centerpiece of which was a bold move to deal with nearly $50 billion in SIVs. Some think that will pave the way for more banks to deal more aggressively with such assets. Goldman Sachs' analyst rewarded Pandit by recommending that clients start accumulating the stock, according to the New York Post. But Mr. Market remains skeptical. Pandit certainly seems willing to act decisively. We'll see where things go.

For more:
- here's a New York Post article

Related articles:
- Wow! Pandit takes major action already
- Pandit faces a tough course
- Video: Vikram Pandit consolidates seven SIVs

Critics quickly train on Pandit

Fri, 14 Dec 2007 06:59:57 -0500

We've noted that when Vikram Pandit was given the job as CEO of Citigroup there were some reservations by some directors. Since then, additional doubt has been voiced by others. Mr. Market certainly displayed its displeasure at the Pandit-Win Bischoff news. The main criticism has revolved around a combined lack of consumer banking know-how, experience running large complex organizations, and--this is the interesting one--personality. People want their CEOs to be dynamic individuals. But there is already a lot of carping about Pandit's personal touch, or lack of. Meredith Whitney of CIBC, in signaling her intentions to be a thorn in his side, told clients the CEO's first meeting with analysts was not confidence-inspiring, as "details were scant and the tone was defensive," according to the Financial Times. We said there would be a short honeymoon. Now, it looks like there will be not be one at all.

For more:
- here's the FT item
- here's an interview of Pandit by Maria Bartiromo

Related articles:
- Meredith Whitney on Citigroup -- again
- More on star analyst Meredith Whitney

Read more on: Meredith Whitney l Vikram Pandit l Citigroup

Meredith Whitney on Citigroup -- again

Thu, 06 Dec 2007 06:59:57 -0500

We've all heard Meredith Whitney's views on Citigroup. The CIBC analyst's latest missive contains a look at a different metric. She reckons Citigroup has more exposure to mortgages with high loan-to-value ratios than its peers. (Specifically, the ratio looks at mortgage on a home against the assessed home value.) According to the AP, her note says that mortgages with a ratio of 80 percent or more is considered significantly risky. And Citigroup has more than $75 billion in exposure to such loans. It has an additional $50 billion in exposure to loans with ratios of 90 percent or more. Needless to say, she's maintaining her sell.

For more:
- here's the AP update

Related articles:
- Analyst gets death threats over Citigroup note
- Meredith Whitney still swinging at Citigroup

ALSO NOTED: HSBC, Citigroup spa over banker in Asia; Carlyle hedge fund hit hard; and much more... ; and much more...

Fri, 30 Nov 2007 06:59:50 -0500

Company News:

> HSBC, Citigroup spar over banker in Asia. Article
> Carlyle hedge fund hit hard. Article
> CIBC's Whitney cuts Lehman estimate. Article
> National Australia Bank buys U.S.-based Great Western Bank. Article
> TD Bank earnings rise. Article
> Wachovia downgrades Piper Jaffray. Article
> More on Citadel's investment in E*Trade. Article

And Finally... Parents rip airlines on kid rules. Article

Citigroup Abu Dhabi deal offers lucrative returns

Wed, 28 Nov 2007 06:59:58 -0500

How desperate was Citigroup? There's no doubt that the big bank needed a massive infusion of cash to shore up its capital ratios. It remains to be seen if the $7.5 billion infusion will be enough. There are some doubters out there, notably Meredith Whitney, of CIBC Global Markets. The New York Post notes that the Abu Dhabi Investment Authority will get a stupendous 11 percent dividend on the convertible preferred shares it will buy. That's much sharply higher than the interest rates paid by even the riskiest junk issues. That's not really stoking a lot of confidence. Obviously, Citigroup still has some work to do to make it through this crisis. All of this begs larger questions...

For more:
- here's the New York Post article

Related articles:
- Citigroup finds a bailout partner
- Middle Eastern money flows to Wall Street
- Prince Alwaleed on Citigroup

Read more on: Citigroup

How rating cuts affect big bank capital positions

Wed, 14 Nov 2007 06:59:55 -0500

Meredith Whitney, analyst at CIBC, is not backing off from her bearish stance on Citigroup. In fact, her bearishness now extends to other big banks, notably Wachovia. Her main concern is capital, and whether banks have enough. The Financial Times' Alphaville does us all a favor by explaining how rating agency downgrades of CDOs and subprime-backed assets can lead to higher capital requirements. These assets carry risk weightings. AAA and AA get 20 percent assignment. BBB gets a 100 percent weighting. So an AAA rated security worth $1 billion would require $200 million in capital. Downgrading that asset to BBB, the capital requirement moves up to par value, $1 billion. Ouch. Basel II apparently imposes tougher standards.

For more:
- here's the article

Related articles:
- Meredith Whitney still swinging at Citigroup
- Analyst gets death threats over Citigroup note