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...Shortly after the financial crisis, she landed one of the toughest assignments at the bank: turning around Citi’s mortgage division, the unit that had created many of the toxic loans that had nearly taken...
...Citi also has a reputation for offering favourable rates on mortgages to its law firm clients....
...And so when the housing crisis and the subprime mortgage boom busted, that left Citi with more of these toxic loans than anyone else and much more than they could afford to carry and take losses on....
...And the riskiest business to be in was subprime mortgage. So Citi ran right into it....
...Average betas there are around 50 per cent, according to Citi, compared with nearly half that a year ago....
...Citi says this goes back as far as 2006, when Rightmove listed. The current weak valuation correlates with new mortgage approvals that have fallen by a half over three years....
...Citi says it serves 700 law firms and 50,000 lawyers in the US and Britain, providing services that include favourable mortgage rates....
...Commercial property, and in particular mortgages on office buildings with low occupancy rates, have been a big concern for lenders since the Fed started lifting interest rates....
...Hunterbrook accused UWS, a mortgage lender, of cultivating loyal mortgage brokers while telling customers they were independent....
...Should NIM stabilise at 2.85 per cent, earnings forecasts for 2024 should then fall by 15 per cent, notes Citi. True, the valuation may reflect much of the risk....
...Commercial property, and in particular mortgages on less-full office buildings, had been one of the biggest factors pushing up problem debts....
...Further down the credit quality ladder, low-grade borrowers including Kinetic Holdings, automobile financing firm Credit Acceptance and residential mortgage company PennyMac Financial Services are among...
...Zoom out beyond Morgan Stanley and Citi and their moves hint at broader pressures....
...Andrew Coombs, analyst at Citi, expects any “moderate decline in net interest margins”, to be manageable because he expects loan losses for the banks to be limited....
...Though direct support has been ruled out by Chancellor Jeremy Hunt, Citi’s Benjamin Nabarro says additional private support now seems likely: The government can exert considerable pressure on the banks...
...“What politicians don’t want to see is much higher mortgage rate pass through compared to savings rates,” said Andrew Coombs, an analysts at Citi....
...Just 2 per cent of the bank’s existing customers have home loans with the new partner lender, notes Citi, which expects mortgage lending to grow at around a 20 per cent compound rate in the next few years...
...Brendan Sproules, an analyst with Citi, said in a research note: “While the ACCC notes that such a transaction may not occur, they appear to not want to rule it out.”...
...They join from Morgan Stanley and Citi, respectively. Coatue Management managing director Aaron Weiner is leaving the group to start a new hedge fund, Bloomberg reports....
...Credit card spending at retailers dropped nearly 11 per cent last month, Citi reported this week, based on data from the bank’s own card customers....
...“The 1Q23 Nim may disappoint, but we always argued that consensus had the quarter-to-quarter timing wrong, as mortgage margin compression is heavily weighted to the first half,” said analysts at Citi....
...The change could generate an extra £1.5bn in investment in UK companies, according to global bank Citi. This compares with the total UK market cap of £2.4tn....
...The equivalent five-year rate, which is closely watched because of its relationship to mortgage lending, was kept steady at 4.2 per cent....
...back into positive territory and industrial profits reversed earlier falls to rise 17.6 per cent year on year, the first positive reading since July 2022 and the highest since November 2021, according to Citi...
...“Maybe monetary policy is not as powerful as it was several decades ago,” said Nathan Sheets, chief economist at US bank Citi....
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