Because of large losses, Citigroup Inc.'s credit card business will likely need further capital injections from the parent company, Moody's Investors Service Inc. warned.
Additionally, Moody's expects earnings for the business, and from the U.S. card industry as a whole, to be hurt further by revenue pressure resulting from regulatory changes signed into law last week.
As a result, Moody's lowered its bank financial strength rating on the credit card business to D but said the business benefits from support from its parent.
Moody's said that Citi's card losses are comparatively high. Despite the unit's recent portfolio repricing, expense reductions and capital infusions, Moody's is forecasting losses for this year and potentially next year.