Citi has $22bn exposure to debt-hit EU

NEW YORK: Banking major Citigroup has exposure of at least $22 billion to five European nations–Greece, Ireland, Portugal, Spain and Italy–grappling with debt woes. Citi, which fought the financial meltdown with US taxpayers' money, has revealed that exposure to these five countries include a $11 billion net credit exposure.

"As of June 30, 2011, Citi's net funded exposure to the sovereign entities of Greece, Ireland, Italy, Portugal and Spain (GIIPS), as well as financial institutions and corporations domiciled in these countries, totalled $13 billion, based on our internal risk management measures," Citi said.

The debt turmoil in all these five nations have raised alarming concerns for the overall health of global economy. Among them, Greece and Portugal are fighting severe financial crisis, which even threatens to result in sovereign defaults.

Citibank, led by India-origin Vikram Pandit, posted a profit of $3.34 billion for the three months ended June 2011, its sixth straight profitable quarter.

Citi's $13 billion exposure includes $2 billion worth assets held in various trading portfolios, that are marked-to-market daily.

Trading portfolio exposure level varies, depending on inventory consistent with customer needs, the banking entity noted.

According to Citi, it also has a $9 billion unfunded exposure, primarily to multinational corporations which are headquartered in GIIPS countries.

"Citi also has additional, locally-funded exposure in these countries to retail customers and small businesses, as part of our local lending activities.

"The vast majority of this is in Citi Holdings (Spain and Greece)," it said.

The banking behemoth stressed that Greece, Ireland, Italy, Portugal and Spain, as well as the financial institutions and corporations domiciled in these nations, "are an important part of the global Citi franchise".

Citi's latest quarterly profit of $3.34 billion came on the back of lower credit costs and improved showing in investment banking segment.