Citigroup Faces an Uncertain Future

Interim Leaders Struggle to Quantify Bank's Losses; Earnings Are Revised

NEW YORK, Nov. 5 -- The day after beleaguered Citigroup acknowledged as much as $11 billion in additional losses and said its chief executive was stepping down, the investment bank's interim leadership took questions from analysts trying to determine how much worse things could get.

Isn't the estimated write-down on the modest side, one analyst suggested during the hour-long conference, given Citigroup's $55 billion in direct exposure to subprime-mortgage-related securities?

"It's a judgment call," Chief Financial Officer Gary Crittenden said.

What about indirect risks posed by bond insurers such as MBIA and Ambac, which do deals with Citigroup and have experienced significant recent setbacks?

"We haven't qualified what that exposure is," Crittenden said.

Can you give us any assurances, pressed another analyst, that there is not another shoe to drop?

"I obviously can't give you any assurances," Crittenden said. "There is no way that I think that anyone can give you an assurance about how things are going to move."

The session highlighted a spiraling sense of uncertainty in the financial world as Citigroup's Charles Prince became the latest chief executive of a major Wall Street firm to lose his job in the face of mounting losses from the recent turmoil in the credit market.

Underscoring the difficulty Wall Street banks are having in valuing their assets, Citigroup on Monday lowered its third-quarter profit, which it announced just three weeks ago, by $166 million, or 3 cents a share. Citigroup's stock closed at $35.90, down $1.83, or 4.9 percent.

Taking questions along with Crittendon in the Monday morning phone call were Win Bischoff, head of Citigroup's European operations who is filling in as chief executive, and former Treasury secretary and longtime Citigroup board member Robert Rubin, who Sunday was named chairman.

In Rubin, the board sees an experienced crisis manager and Wall Street veteran. He rose through the ranks of Goldman Sachs, becoming its co-chairman, and led the Treasury Department during the Asian financial crisis in the late 1990s. Rubin and three other members of the board -- including Richard Parsons, who on Monday announced his own resignation as chief executive of Time Warner -- are to lead the hunt for Prince's replacement.

Whoever takes over Citigroup, the biggest U.S. bank by assets, faces the daunting task of leading a global financial behemoth that draws more than half of its revenue from abroad and whose businesses include credit cards, student loans, financial planning, hedge funds and, of course, the packaging and selling of exotic securities backed by subprime mortgages.