Citigroup stock hits old low

November 14, 2008|By From Sun news services

Shares of Citigroup Inc. fell below $9 a share for the first time since 1996 yesterday after a published report said it was looking for a new chairman and that it is considering a bid for Bethesda-based Chevy Chase Bank.

The Wall Street Journal reported yesterday, citing people familiar with the matter, that some Citigroup board members are increasingly dissatisfied with the company's performance and are considering replacing Chairman Sir Win Bischoff. The board named Bischoff chairman in December after ousting former CEO Charles Prince. Citi officials denied the report.

"Any report that the board is searching for a new chairman is false," said Citigroup spokeswoman Christina Pretto.

The Journal also reported that Citigroup is in talks to buy the Maryland regional bank Chevy Chase Bank, which has 34 branches in the Baltimore area, according to the Federal Deposit Insurance Corp. Citigroup's Pretto declined to comment on the matter. A message left with a Chevy Chase Bank official was not immediately returned.

Citigroup, which has suffered four straight quarters of losses because of bad bets on mortgages and other deteriorating loans, has seen its stock plunge 67 percent this year. After falling below $9 earlier yesterday, shares rebounded with the broader market, closing down 19 cents to end at $9.45.

The New York-based company reported net losses of more than $10 billion in the first nine months of 2008. Last month, Citigroup lost out on a deal to buy the much larger bank Wachovia Corp. Wells Fargo & Co. nabbed the Charlotte, N.C.-based bank instead.

Chevy Chase Bank has $11 billion in deposits, according to data from the FDIC, and nearly 300 offices in the metropolitan area surrounding Washington. Chevy Chase is the Baltimore area's 14th largest bank with $627 million in deposits, according to the FDIC.

Bloomberg News and the Associated Press contributed to this article.

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