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Could Citibank be the next Bear Sterns?
They're looking for another $3 billion in financing, no indication as to when it'll stop...it really seems like this company could be another Bear Sterns.
What do you think?
Best Answer
141 points
gap answered one year ago …
Citibank earns a significant part of it's revenues from overseas operations...this may posssibly act as a cushion..raising capital,laying of staff,closing down some operations and branches,selling off problem bonds are all fire fighting measures...problem is we yet dont know the extent of leverage on problem CDOs to it's total assets...gut feeling is that it will be a painful three to four years ahead for this bank as it tries to regain some colour on it's very pale face right now...It may come close to a Bear Stearns like situation but will be baled out by the Fed and sovereign Funds and some of it's big shareholders...there is no miracle drug for Citi's problems to be solved overnight...It really has no option but to cut costs and raise billions to fund mounting losses..It's probably the end of the Beginning and the worse is yet to unfold as 2008 and 2009 unfolds
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951 points
Grudun answered one year ago …
No, Citibank will not be the next Bear Sterns. The advantage Citibank has that Bear Sterns doesn't is it has a bussiness to support it that generates revenue regardless of how its investments are going giving it intrinsic value beyond the cash value of its assets. This is not to say it won't die slowly(we could easily be watching that now) but it will not the rapid failure will not happen.
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