Citi has a world of problems. The bank is proud of its global reach 1,400 branches in 46 countries. But in Asia, the economies of China and India are slowing, economictimes reports.. And Europe, the source of one in three dollars that Citi brings in, may be on the brink of financial disaster.
Citi's rivals JPMorgan Chase and Bank of America have Europe problems, too, but they also have US branch networks about five times the size of Citi's. And bank business in the US, like the economy, is improving.
Wells Fargo has hardly any European business at all, and was rewarded Tuesday with a small gain in its stock price after reporting impressive quarterly earnings. Citi disappointed Wall Street and got pummeled, down 8 per cent.
Being worldly isn't so sexy anymore. "The effect of a contagion from Europe will be catastrophic for Citi," said Jeffrey Sica, chief investment officer of Sica Wealth Management, an independent wealth manager. At year's end, Citi held USD 33.4 billion in debt issued by European countries and loans to businesses in debt-hobbled countries such as Greece, France, Belgium and Ireland. While comparisons are difficult because banks have different standards for judging "exposure," Fitch Ratings, a prominent credit rating service, said in November that Citi was the most exposed of the big US banks….
Find out more at http://economictimes.indiatimes.com/news/international-business/why-citigroup-has-a-world-of-problems-being-worldly-isnt-sexy-anymore/articleshow/11541756.cms
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