Economy

Citigroup Inc too optimistic on DTAs say sources

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Economy
Written by Roberta Murray   
Tuesday, 07 September 2010

Morning Business News, Tuesday 07 September: Citigroup Inc, Barclays, Mark Hurd and Henderson given ultimatum.

 

Citigroup Inc (NYSE:C) is of the opinion that it is strong enough to avoid having to set aside funds to cover $50bn of Deferred Tax Assets (DTAs).

However, some analysts have said that the bank is overestimating its long term health and would do well to cut back on it's DTAs which were accumulated partly because of its huge losses during the financial crisis. The deffered taxes form a sizeable portion of Citigroup's asset base.

According to the FT "some argue Citigroup is being too optimistic given its recent record – its pre-tax losses in 2008 and 2009 topped $60bn – and continued global economic uncertainty."

"Why should auditors, investors, regulators and others rely on Citigroup’s projections . . . to justify the use of their DTAs?" Mike Mayo, a CLSA analyst, wrote in a recent note.

Barclays appointes Diamond


Barclays risks a confrontation with the Government today when it confirms that Bob Diamond, Britain’s best-paid banker, is to become its chief executive.

The Times has learnt that the bank will announce Mr Diamond, an American who has amassed an estimated fortune of £100m, as successor to John Varley next March. Mr Diamond currently heads the group’s investment banking arm, Barclays Capital, and his new appointment is likely to prove explosive.

Hurd heads to Oracle


Mark Hurd, ousted as chief executive of Hewlett-Packard last month, has made a dramatic return to corporate America at rival Oracle.

Mr Hurd will become a president of the company and a member of the board, reporting into Oracle's chief executive, Larry Ellison.

Charles Phillips resigned as a president of Oracle and as a member of the board. "Mark did a brilliant job at HP and I expect he'll do an even better job at Oracle," said Mr Ellison, the Telegraph reports.

Henderson given ultimatum


Henderson, one of the City’s top investment houses, has been given a two-week ultimatum to pay compensation to pension funds responsible for the retirement incomes of hundreds of thousands of people after a seemingly low-risk investment vehicle went badly wrong.

A group of 30 pension funds has written to Henderson Group demanding compensation after they lost about £350m in the ill-fated infrastructure fund, the Times reports.

 

 
 
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