(Recasts, adds details, share movement) Oct 31 (Reuters) - UBS widened its loss view on Citigroup Inc’s (C.N) fourth quarter saying the company’s far reaching global footprint could take a harder hit from the spreading financial crisis than estimated earlier.
The brokerage also slashed its 2009 profit view on Citigroup by 80 percent.
“We expect the pace of credit deterioration outside the U.S. to accelerate, and what had been the engine of growth of its (Citigroup‘s) consumer business to slow,” UBS analyst Glenn Schorr wrote in a note to clients.
Contraction in the U.S. and western European markets and slower growth in other markets added to the worst capital markets backdrop in the U.S. since the start of the fourth quarter. This will cause higher credit losses and further writedowns of remaining troubled assets at Citigroup to go on into 2009, the analyst said.
Schorr also expects Citigroup to be hit by an even more protracted slowdown in receivables growth globally, including the United States, as consumers pull back on spending over the near-to-medium term.
UBS widened its fourth-quarter loss view for Citigroup by 36 cents to 56 cents a share, and its 2008 loss view to $2.73 a share from $2.36 a share. The brokerage also slashed its 2009 profit view on the company to 30 cents per share from $1.60 per share.
UBS cut its price target on the stock by $3 to $14.
Citigroup shares were up 55 cents at $13.66 in afternoon trade Friday on the New York Stock Exchange. The broader market KBW Banks Index .BKX rose as much as 4 percent to 58.48. (Reporting by Amiteshwar Singh in Bangalore; Editing by Gopakumar Warrier)