Citigroup Inc may need to raise as much as US$10 billion to meet the US government’s increased capital standards for banks outlined in its stress tests, according to a report.
The New York-based bank is negotiating with the Federal Reserve and may need less capital if it is able to convince regulators of its financial health, the Wall Street Journal said on its Web site.
The report cited people familiar with the matter.
A Citigroup spokeswoman said the bank had no comment on the Journal report.
On Friday, the US government pushed back its expected release date of the stress test results to Thursday from tomorrow, as regulators negotiate with the banks over the findings.
In addition to an overall snapshot of the health of the 19 large banks being assessed, the Fed will provide detail about individual banks, according to a government official, who spoke on condition of anonymity because of the sensitive nature of the matter.
The Fed will describe the resources banks would need to absorb losses on certain types of loans and investments under adverse economic conditions.
Last week, Fed officials said all 19 banks that underwent the stress tests will need to keep extra capital on hand beyond what’s now required in case losses on loans and other assets continue to climb. That was a signal some banks would have to raise more cash.
Initial results indicated that both Citigroup and Bank of America Corp would be among that group, sources told The Associated Press earlier this week.
Banks will have up to six months to raise money from private sources, Federal Reserve Chairman Ben Bernanke has said. If they can’t, the government would provide aid.
One option for help: Allow the government to sharply increase its stakes in banks.
That would be done by converting the government’s stock in banks from preferred to common shares.
It would not require any additional taxpayer money, although it would increase their risks.
Another option is having the government make a fresh capital infusion in a bank using taxpayer money from the US$700 billion financial bailout pot.
Citigroup has already received US$45 billion in federal funds.
The government, which will soon own a 36 percent stake in the bank, has also agreed to insure a pool of more than US$300 billion of its riskiest assets.
Earlier on Friday, Citigroup announced that it was selling its Japanese brokerage business to Sumitomo Mitsui Financial Group Inc for about US$5.6 billion. The troubled bank has been shedding businesses over the past year to slim down and raise cash.
Citigroup posted a first-quarter loss to common shareholders of US$966 million, or US$0.18 per share. The loss was smaller than analysts had forecast.
PROTECTION: The investigation, which takes aim at exporters such as Canada, Germany and Brazil, came days after Trump unveiled tariff hikes on steel and aluminum products US President Donald Trump on Saturday ordered a probe into potential tariffs on lumber imports — a move threatening to stoke trade tensions — while also pushing for a domestic supply boost. Trump signed an executive order instructing US Secretary of Commerce Howard Lutnick to begin an investigation “to determine the effects on the national security of imports of timber, lumber and their derivative products.” The study might result in new tariffs being imposed, which would pile on top of existing levies. The investigation takes aim at exporters like Canada, Germany and Brazil, with White House officials earlier accusing these economies of
Teleperformance SE, the largest call-center operator in the world, is rolling out an artificial intelligence (AI) system that softens English-speaking Indian workers’ accents in real time in a move the company claims would make them more understandable. The technology, called accent translation, coupled with background noise cancelation, is being deployed in call centers in India, where workers provide customer support to some of Teleperformance’s international clients. The company provides outsourced customer support and content moderation to global companies including Apple Inc, ByteDance Ltd’s (字節跳動) TikTok and Samsung Electronics Co Ltd. “When you have an Indian agent on the line, sometimes it’s hard
‘SACRED MOUNTAIN’: The chipmaker can form joint ventures abroad, except in China, but like other firms, it needs government approval for large investments Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) needs government permission for any overseas joint ventures (JVs), but there are no restrictions on making the most advanced chips overseas other than for China, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. US media have said that TSMC, the world’s largest contract chipmaker and a major supplier to companies such as Apple Inc and Nvidia Corp, has been in talks for a stake in Intel Corp. Neither company has confirmed the talks, but US President Donald Trump has accused Taiwan of taking away the US’ semiconductor business and said he wants the industry back
PROBE CONTINUES: Those accused falsely represented that the chips would not be transferred to a person other than the authorized end users, court papers said Singapore charged three men with fraud in a case local media have linked to the movement of Nvidia’s advanced chips from the city-state to Chinese artificial intelligence (AI) firm DeepSeek (深度求索). The US is investigating if DeepSeek, the Chinese company whose AI model’s performance rocked the tech world in January, has been using US chips that are not allowed to be shipped to China, Reuters reported earlier. The Singapore case is part of a broader police investigation of 22 individuals and companies suspected of false representation, amid concerns that organized AI chip smuggling to China has been tracked out of nations such
RSS