Citigroup is the latest big-name victim of the subprime crash, the company announced today, warning of a 60% third-quarter earnings drop. Full earnings will be out Oct. 15, but it appears net income will drop to $2.2 billion from the $5.51 billion reported last year. “Our expected third-quarter results are a clear disappointment,” said CEO Charles Prince.
Even before the announcement, Prince was under pressure because of Citi’s stagnant share price, which fell 1% in early trading on the news. The group joins a host of financials who made losing bets on subprime-related investments. Prince promised a return to normalcy next quarter, which the Times says is when investors will learn the real extent of subprime’s ravages.