The financial giant Citigroup Inc. is reportedly bracing for loan losses amid macroeconomic uncertainty.
To deal with the potential losses, the investment bank is planning to put aside hundreds of millions of dollars more than it did in the previous quarter, Bloomberg reports.
[adinserter block="1"]While speaking at a Morgan Stanley conference this week, Vis Raghavan, Citigroup’s head of banking, reportedly cautioned that the firm’s credit reserve build can change its outlook rapidly.
“Given the macro environment, etc., cost of credit compared to last quarter, we expect to be up a few hundred million.”
Bloomberg also reports, however, that analysts expect loan losses to go down in the second quarter.
Raghavan said 80% of Citigroup’s corporate exposure is to entities with high creditworthiness.
“We still have a few more weeks to go in this quarter, but on the credit overall, I’m incredibly reassured of the quality.”
The executive reportedly notes, however, that the firm’s investment banking business has been hurt by the ongoing macroeconomic uncertainty.
“What investment banking likes is clarity. So either it’s really bad or really good, whatever it is, just give us the news, but it is that middle area of not knowing that really freezes market activity.”
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