Citigroup could lose as much as $7 billion on currency
swings if Charles Peabody is right, putting the analyst at odds with peers who
say the stock will be the best performer among big U.S. banks in the year ahead.
Peabody, who leads research at Portales Partners LLC, is
among only four analysts out of 34 tracked by Bloomberg who recommend investors
sell Citigroup shares. He estimates the bank may lose $5 billion to $7 billion
in regulatory capital this year if the dollar gains against the yen, euro and
currencies in emerging markets, which provide about half the firm’s profit.
That would be its worst translation loss in five years, exceeding the $3.5
billion deficit in 2011.
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