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Citi’s Woes

It is just the first day of a new quarter, but Citigroup Inc’s profit warning on Monday for third-quarter results suggests the storm from sub prime-related lending is not over and could wreck further havoc with corporate earnings. Chuck Prince, Chief Executive of Citigroup, faced fresh calls for his removal after the bank revealed it suffered $6bn of writedowns and losses in the third quarter after turmoil in the credit markets. Citi’s share price has languished in recent times, and the Chief has been criticised for the company’s sluggish growth and ballooning costs. In April he had announced plans to axe 17,000 jobs. Shares of Citigroup fell 2.4 percent before the opening bell, but were up $1.12, or 2.4 percent, at $47.79 in midday trade on speculation that Mr. Prince, would resign. Citi is not alone in all this sub prime mess. On the same day as the bank’s announcement, Swiss Bank UBS AG disclosed $3.4 billion in losses, raising concerns about whether other banks that have not yet reported third-quarter results also will warn. Smaller rival Credit Suisse said its profit too would fall sharply. More in this Google cache.

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