Two of the world’s biggest banks announced $10bn (£4.8bn) losses yesterday as they gave warning of massive hits to their third-quarter results. The Times. The Independent. The Daily Telegraph. The Guardian. Financial Times
American banking giant Citigroup announced almost $6bn of pretax losses, writedowns and rocketing credit costs. Charles Prince, Citigroup’s beleaguered chairman and chief executive, said that its third-quarter net profit would plunge about 60% to $2.2bn and admitted that the results were a ‘clear disappointment’ and ‘unusually poor in certain businesses’.
At the investment banking arm of UBS, Switzerland’s biggest bank, Huw Jenkins, chairman and chief executive, was ousted after the bank’s fixed-income division wrote down SwFr4bn (£1.6bn) of assets held by its hedge fund and mortgage-backed securities businesses.
As a result, the group will post a pretax loss of up to SwFr800m for the three months to 30 September. UBS said it would cut 1,500 jobs, and most expected to have left by Christmas. It is believed to have up to 7,260 on the payroll in London.
As analysts predict that the fallout from the credit crunch will continue, attention will next focus on Deutsche Bank, which reports on its third quarter on 31 October.