As Banks Prepare to Release Results Investors brace for Losses (Reuters) (14-01-2008)

LONDON (Reuters) - Major American banks begin to release their fourth quarter results this week and are expected to post substantial losses while they try to secure more cash from abroad.

According to a report on the CNBC website on Sunday, among them, Citigroup could write off as much as $24 billion (12.2 billion pounds) and lay off 20,000 workers in a drive to cut costs and boost capital. CNBC said the plans will be unveiled on Tuesday when Citi, the largest U.S. bank by assets, reports fourth quarter results.

Merrill Lynch is also seeking funds and the Financial Times said on Monday that the second raising of $4 billion may come from the Kuwait Investment Authority, which is expected to be a significant investor. A deal could be announced as soon as midweek.

The New York Times on Friday reported Merrill was expected to suffer $15 billion in losses stemming from bad mortgage investments, almost twice the company's original estimate, when it releases its results later this week.

The FT also reported on Saturday that Citigroup was putting the final touches to its second big fundraising, seeking up to $14 billion from Chinese, Kuwaiti and other investors.

The $200 billion Kuwait Investment Authority had no immediate comment on Monday on the reports it may buy into the two damaged American banks.

Banks, wrestling with huge losses stemming from mortgages lent to people ill-equipped to repay them, have been seeking cash from sovereign wealth funds.

In December, Merrill Lynch secured as much as $7.5 billion by selling a stake to Singapore's government and an asset manager. The month before, Citi agreed to sell up to a 4.9 percent stake to Abu Dhabi for the same amount.

As well as Merrill and Citi, other big names such as State Street and JP Morgan report results this week.

The Federal Reserve will auction $30 billion later on Monday and the European Central Bank and Swiss National Bank will continue their unprecedented U.S. dollar lending to banks, as part of ongoing coordinated central bank efforts to help calm credit market tensions.

Swiss banking giant UBS AG appealed to its shareholders last week to back a capital injection by the Singapore government and a Middle East investor and warned it still could not predict how the subprime crisis will play out.

And shares in stricken British lender Northern Rock, the biggest casualty of the credit crunch, fell as much as 7 percent early on Monday, on fresh concerns the bank is facing imminent nationalisation.

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