Citibank Boosts Reserves, Indicates More Problems May Lie Ahead

NEW YORK – Citibank is reporting significantly increased credit costs within its consumer banking business, with some analysts saying the losses are a signal of broader problems among consumers. The bank said it also has boosted reserves to cover some losses “not yet visible” and to address “declining new residential sales.” “This quarter, we continued to see higher delinquencies in our overall consumer mortgage portfolio, and our reserve increase reflects these trends,” said Citibank’s CFO Gary Crittenden. The company had nearly $6 billion of unexpected losses and charges in the third quarter. Approximately 44% of the charges and losses, or $2.6 billion, came in the form of higher credit costs, largely related to its consumer portfolio. The $2.2-trillion bank boosted its loan loss reserve by $245 million.