Business | Banking
Citigroup faces tough fight to stay afloat
Citigroup, which is slashing 52,000 jobs to ride out the present financial crisis, might not be able to stay afloat even as it tries to scale its balance sheet down to roughly its size in 2005 and 2006.
- Gulf News Report
- Published: 23:40 November 18, 2008
Dubai: Citigroup, which is slashing 52,000 jobs to ride out the present financial crisis, might not be able to stay afloat even as it tries to scale its balance sheet down to roughly its size in 2005 and 2006.
If it were to generate about $85 billion in revenue in 2009, similar to levels of a few years ago, and expenses were no more than the $50 billion to $52 billion it is aiming for, it could still face losses if it had to set aside at least $35 billion for the year to cover loan losses, Reuters said on Tuesday.
The news came as UAE shares witnessed a mixed day with the Dubai benchmark declining more than five per cent and Abu Dhabi index gaining more than one per cent.
Worries about Dubai's real estate sector and debt financing persist, with a Citigroup report saying that the emirate was the most "vulnerable" among the six Gulf states to a global downturn.
The UAE government, however, stressed that it is prepared to face any situation and assured residents that the economy is on solid ground. Banks and financial institutions have availed only Dh25 billion of the Dh120 billion pumped in by the government, said Sultan Bin Saeed Al Mansouri, Minister of Economy.
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