Citigroup Inc, the US' largest financial institution, yesterday warned that its third-quarter earnings were likely to decline by 60 percent as it takes more than US$3 billion in writedowns for securities backed by underperforming mortgages and loans tied to corporate buyouts.
The announcement from Citigroup came as the Swiss bank UBS AG said it would post a loss of up to US$690 million in the third quarter, partly owing to losses linked to US subprime mortgages.
Subprime mortgages -- loans given to customers with a poor credit history -- have gone delinquent or defaulted at rising rates in recent months, causing banks to lower the value of the loans as investors shy away from buying them.
Weakness in that business spread to other credit markets, leaving banks stuck with loans they promised during the merger and acquisition boom.
Citigroup will write down about US$1.4 billion on funded and unfunded loan commitments when it announces its third-quarter results.
It will record losses of about US$1.3 billion on the value of securities backed by subprime loans. Citigroup will also record a loss of US$600 million in fixed-income credit trading owing to market volatility.
Third-quarter global consumer credit costs also increased by US$2.6 billion from the same quarter a year ago, the company said.
About 75 percent of that increase is the result of rising loan-loss reserves -- money held to cover loans that default.
The bad news from UBS and Citicorp prompted money-market rates to climb on fresh concern about the depth of the crisis.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
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