Citigroup may need $10 billion more: report

I / Washington May 2, 2009, 10:31 IST

US bank Citigroup may need to raise up to $10 billion in new capital as the government of President Barack Obama continues talks with banks over the results of its "stress tests," the Wall Street Journal reported Friday.      

The money would be in addition to the $45 billion Citigroup has already received from the government since late 2008.     

"The bank, like many others, is negotiating with the Federal Reserve and may need less if regulators accept the bank's arguments about its financial health," the Journal reported on its online edition, citing unnamed people familiar with the matter.     

"In a best-case scenario, Citigroup could wind up having a roughly 500 million cushion above what the government is requiring," the Journal reported.      

US officials will reveal on May 7 results on "stress tests" conducted on the 19 biggest US banks that have received public aid to weather the global financial crisis, a government source told AFP Friday on condition of anonymity.      

The results of the tests of the banks' capacity to withstand a worse-case scenario of the current recession will be published after the stock market closes Thursday, the source said.

The tests are being conducted by the Federal Reserve and other regulators at the request of the US Treasury.      

According to the government source, the tests should reveal information about the banks as a group, as well as details on each individual bank.      

The US government owns a 36 per cent stake in Citi following the latest bailout and conversion of special preferred shares to common stock.      

Citi, which has been hammered as a result of the US housing meltdown and subsequent credit crunch, said in mid-April that it had trimmed 13,000 jobs since the fourth quarter and 65,000 since peak levels to leave its total workforce at 309,000.