(Corrects to clarify that the estimated first-quarter markdowns for Citigroup and JPMorgan Chase are for their leveraged loan commitments, not for their entire loan portfolio) (Recasts; adds details)
Feb 25 (Reuters) - Oppenheimer & Co analyst Meredith Whitney cut her first-quarter and 2008 earnings estimates on major U.S. banks, and said bank losses will be the highest in the past 20 years or more due to greater individual defaults on mortgages and other loans.
Whitney expects Citigroup (C.N) to have the largest first-quarter writedown on leveraged loans, ranging from $2.1 billion to $3.0 billion, given its highest leveraged lending commitments.
She expects JPMorgan Chase & Co (JPM.N) to mark down $1.3 billion to $1.8 billion of its leveraged loans during the quarter.
Whitney believes U.S. home prices will fall by about 3 times the present level over the next two years.
Near-term issues of focus for financial investors would be actual loan loss exposures, reserves, necessary provisioning and subsequent earnings power, Whitney said.
Following are estimate changes for the first quarter and 2008 made by Oppenheimer: Company Q1 EPS estimate 2008 EPS estimate New Old New Old Bank of America (BAC.N) $0.92 $1.01 $3.65 $4.10 Citigroup Inc (C.N) -$0.28 $0.68 $0.75 $2.70 JPMorgan Chase (JPM.N) $0.86 $1.03 $3.20 $3.90 Wachovia Corp WB.N $0.78 $0.96 $3.05 $3.95 Wells Fargo & Co (WFC.N) $0.55 $0.68 $2.15 $2.65 (Reporting by Ramya Dilip in Bangalore; Editing by Pratish Narayanan)