Citigroup, the largest bank in the U.S., is expected to take substantial second quarter write downs for subprime mortgages, leveraged buyout loans and other assets. The bank’s chief financial officer Gary Crittenden told investors via phone on Thursday that second quarter markdowns will be smaller than the first quarter, but substantial nonetheless. “The marks in this quarter are unlikely to be of that same magnitude, but again they are still sizable marks,” Crittenden said.
In the first quarter, Citigroup posted a $6 billion loss and the bank wrote down $1.5 billion for exposure to bond insurers.
Costs linked to worsening subprime credits could have a meaningful impact on Citigroup’s results for the rest of the year. “We will continue to have substantial additional marks on our subprime exposure this quarter,” Crittenden said. “We may continue to see the magnitude of the marks decline, as the exposures that we have have declined.”