Citigroup shares fall on forecast

Citigroup has been hard hit by the credit crisis

Shares in Citigroup have slumped after a report forecast more heavy losses for US banks due to the credit crisis.

Research from fund manager Oppenheimer said that Citigroup could lose up to $13.1bn (£6.5bn; 8bn euros) in the first three months of the year.

Citigroup and other banks have lost vast sums on investments made in assets backed by US mortgages that have been hit by falling US house prices.

Citigroup shares lost almost 6%; other banks were down sharply too.

Bank of America, JP Morgan Chase and Wachovia can also expect to see a sharp drop in their profits, according to Oppenheimer.

The report also said the situation could get worse this year.

In October the fund management company correctly predicted that Citigroup would have to cut its dividend - the payments made to shareholders - and seek extra funds.

The bank reported a $9.83bn net loss for the last three months of 2007.

Chief executive Vikram Pandit said the loss had been caused by a $18.1bn exposure to bad mortgage debt and was "clearly unacceptable".