Citigroup, the new combination of Citicorp and Travelers Group, said yesterday the global financial crisis would cause a sharp decline in third-quarter profits. Citigroup made its debut on the New York Stock Exchange yesterday.
A statement by co-chairmen Mr John Reid and Mr Sanford Weill said that "almost unprecedented instability of global fixed income and emerging markets had a severe effect on both Salomon Smith Barney and Citibank's corporate banking activities in the quarter".
Salomon Smith Barney, Citigroup's brokerage unit, will report a net loss in the quarter of some $325 million (£209 million), reflecting gross after-tax losses of about $700 million related to global arbitrage and Russian credit losses.
Citibank's corporate banking division will report a net loss of about $130 million largely due to approximately $240 million in after-tax losses related to Russia.
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