citibanks going to bankruptcy

Reading Header : CITIBANK BANKRUPTCY /BAILOUT

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April 18 , 2009

Introduction

Bankruptcy refers to declaration of inability of a company to pay creditors who may bankruptcy petition against a debtor (involuntary bankruptcy ) in to recoup what they owe or the voluntary bankruptcy initiated by bankrupt debtor /individual . Citibank is a global bank but operates at a local level hence it offers support networks and vast resources as a large international bank and was the first bank in UK to launch PC

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Reasons for Citibank bankruptcy

Citibank experienced unexpected huge losses and the retail sales were lower . The bank made net loss of 9 .83 billion while per share loss was 1 .99 . Other surprises included the 18 .1 billion write down for CDOs and other bad mortgage-based securities was almost twice as much as expected , the high write down leaves the impression that there are a lot more write downs to come , at Citi and at other financial institutions and the 4 .1 billion loss in its credit card business , primarily related to defaults by credit card customers , was linked to the sharp fall in retail sales to indicate broader problems as explained by Vikram Pandit Chief Executive Officer of Citi . These results reflected the White downs on the Sub-Prime Related Direct Exposures in the fixed income markets and the increased credit costs related to higher current and estimated losses on consumer loans . The banks poor performance was driven by two...