Citigroup Inc. and Marshall & Ilsley Corp. were among the worst-performing stocks in the Standard & Poor's 500 Index last year, dragged down by defaults on commercial and residential property loans that may extend their declines into 2010.
Marshall & Ilsley tumbled 60% through Thursday, the index's biggest drop, according to data compiled by Bloomberg. Huntington Bancshares Inc. fell 52%, Citigroup 51% and Zions Bancorp. 47%.
Overall, banks supplied seven of the 10 worst performers in the S&P index.
Marshall & Ilsley, Wisconsin's biggest bank, has been pummeled by housing and construction loan defaults in Florida and Arizona. The Milwaukee lender has reported four straight quarterly losses and said it set aside as much as $578.7 million in the third quarter to cover bad loans.
"The worst of Arizona and Florida problems [is] now behind them," said Tony Davis, an analyst at Stifel Nicolaus & Co. "Having taken $160 million in chargeoffs in their correspondent banking division," M&I "probably has also … completed," he said, "the heavy lifting in that portfolio."
Citigroup in December joined Wells Fargo & Co. and Bank of America Corp. in raising cash to escape the government's restrictions tied to "extraordinary financial assistance" they have received.
Citi sold $17 billion of shares at $3.15 each, which is less than the $3.25 the U.S. paid to acquire a one-third stake in September. This price weakness prompted the Treasury to delay selling its shares.
Citigroup spokeswoman Danielle Romero-Apsilos declined to comment.