CNBC Reports possible $24 billion Writedown for Citigroup (MarketWatch) (14-01-2008)

LONDON (MarketWatch) -- According to a report by CNBC on Monday, Citigroup may write off up to $24 billion due to subprime and credit-related losses; as many as 20,000 jobs at risk.

The bank may also be forced to cut its dividend payment, CNBC reported, without attribution. It may raise as much as $15 billion from selling stakes to foreign and domestic investors, the report said. Although the Wall Street Journal today reports that it may not all be smooth sailing for Citibank in its attempt to raise capital by selling a $2 billion stake to China Development Bank; the Chinese government may oppose it.

Meanwhile, the Financial Times reported that the Kuwait Investment Authority may invest as much as $3 billion in Citigroup.

The paper also reported that Kuwait may take as much as a $4 billion stake in Merrill Lynch. Merrill Lynch is due to report its fourth-quarter results on Thursday. Last week, The New York Times reported that Merrill's write-down could be as much as $15 billion.

For Citi and Merrill, any fresh capital injection this week would represent a second round of foreign help.

The Abu Dhabi Investment Authority poured in $7.5 billion into Citi in November, while Singapore's Temasek Holding, along with Davis Selected Advisors, injected $6.2 billion into Merrill Lynch in December.

Morgan Stanley and UBS also have turned to the Middle East and Asia to help stem subprime-related losses.

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