Citigroup Sees Substantial 2Q Writedowns, Rising Credit Costs

Citigroup’s latest discussion of its business prospects belies the idea that the credit markets are on the mend. From MarketWatch:

Citigroup Inc. Chief Financial Officer Gary Crittenden said Thursday that the bank faces continuing credit problems in the second quarter, with credit costs rising, provisions for bad consumer loans growing and “substantial” write-downs for subprime assets likely.

“If current trends prevail, it is fair to conclude we will continue to have substantial additional marks on our subprime exposure this quarter,” Crittenden said during a conference call sponsored by Deutsche Bank.
Crittenden added that it’s reasonable to expect that credit costs will continue to rise through 2008, and that provisions for losses in its consumer business will also grow.

Crittenden said that Citi expects revenue growth of 9% “two to three years out” and sees long-term expense reduction of $15 billion.

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