Citigroup raising $14.5 billion after $18 billion write-down, cuts dividend

Our Corporate Bureau
15 January 2008

Mumbai: Citigroup Inc, the largest US bank, said it will raise at least $14.5 billion and cut its quarterly dividend 41 per cent to help shore up a capital base depleted by an $18.1 billion write-down in subprime mortgage and consumer credit related losses.

The $18.1 billion write-down includes $17.4 billion in collateralised debt obligations.

Citi also reported an overall fourth quarter loss of $9.83 billion, or $1.99 per share - its first quarterly loss since its inception in 1998 - after the write-downs and a $4.1 billion increase in US credit costs.

Citigroup also cut its quarterly dividend to 32 cents per share from 54 cents, a move that could save it more than $4 billion a year.

Citigroup said it would raise $12.5 billion from a private sale of convertible preferred securities, including $6.88 billion from a Singapore-affiliated fund, chief executive Sanford Weill and his family foundation, Saudi Prince Alwaleed bin Talal, the Kuwait Investment Authority, the money manager firm Capital Research & Management, and the state of New Jersey.

The bank will also sell $2 billion of convertible preferred securities to other investors, and sell additional preferred securities.