Charlotte.com: Banking
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• Analysts: Citi write-down set to top warning
  When Citigroup warned in early November it was likely to write down its portfolio by $8 billion to $11 billion in the fourth quarter because of exposure to bad loans, investors recoiled at the size of the losses. Some now say those estimates appear drastically understated.Citigroup Inc. could write off as much as $18.7 billion in the fourth quarter, wrote Goldman analysts William Tanona, Betsy Miller and Neil Sanyal in a note to investors late Wednesday. If it does, they say, the bank may be forced to lower its dividend by 40 percent.Citi has about $55 billion in exposure to subprime mortgages, about $43 billion of which are collateralized debt obligations, or CDOs, that have mortgages underlying them."We still believe it will be a couple of quarters before the current credit crisis is fully digested by the markets," the Goldman analysts wrote.Already, Citi has been propped up by a $7.5 billion investment from the Abu Dhabi Investment Authority, a sovereign wealth fund that in late November bought a 4.9 percent stake.But if Citi must write down the value of its portfolio by more than it estimated back in early November -- a distinct possibility, given the lack of improvement in the tight credit markets -- Goldman analysts said the bank may need to raise an extra $5 billion to $10 billion in cash.When Citi said Nov. 4 that its write-down could be between $8 billion to $11 billion, it acknowledged the value could end up being larger. Citi said at the time it would not revise its estimate throughout the fourth quarter as credit conditions change, and spokeswoman Shannon Bell said Thursday the bank does not comment on analyst reports.A dividend cut is a possibility facing many banks wrangling with their losing investments in subprime mortgages.Citi's board has said it intends to maintain its dividend, but the new CEO, Vikram Pandit, did not rule out a dividend cut when asked about it on Dec. 11.Citi has gone through quite the overhaul since the summer. In early November, Citi ousted chief executive Charles Prince. About five weeks later, he was replaced with Morgan Stanley alum Vikram Pandit. Pandit had been in charge of Citi's investment banking, which has recently been restructured.
• Charlotte bankingon different candidates
  Employees of Bank of America and Wachovia are known for sticking to their side of uptown Charlotte. In the upcoming presidential election, they're also backing different candidates.Among Bank of America employees, Democrat Barack Obama is the favorite in 2008, according to an analysis of individual campaign contributions. At Charlotte rival Wachovia, Republican John McCain got the most checks.The split among the banks contrasts with the industry's overwhelming support in 2004 for Republican George W. Bush. The data, compiled from candidate disclosures by the nonpartisan Center for Responsive Politics, shows how some in financial services are leaning amid turmoil in the mortgage business and calls for more regulation.The diversity of contributions mirrors uncertainty among voters about which candidates will emerge as front-runners, said Ted Arrington, professor of political science at UNC Charlotte. The first primaries and caucuses take place next month."It also reflects the notion that big business gives to both parties because they want access to whoever wins," he said.The two banks are dominant players in the Charlotte business scene, and their employees' contributions far outweighed the donations from workers at the seven other area Fortune 500 firms, the analysis found.In the 2008 cycle, every industry is leaning more Democratic than it did in 2004, said Massie Ritsch, spokesman for the Center for Responsive Politics, a Washington-based nonprofit that tracks money in politics. From banks and securities firms, Democrat Hillary Clinton has raised the most money ($5.7 million), followed by Obama ($5.4 million) and Republican Rudy Giuliani ($5.1 million), according to the center's data.In 2004, Bush's nearly $12 million from financial services firms doubled the take of Democrat John Kerry."What's different is we have an open seat this time," Ritsch said. "Donors in the past may have been guessing that President Bush would be back in office."Overall split by partyIn its analysis, the Observer examined more than 500 individual contributions worth $645,630. The donations were disclosed by candidates in filings that counted through Sept. 30. The next round of campaign finance reports comes next month.The data included donations of at least $200 from givers nationwide who identified themselves as working for one of the banks; spouses are also included.Bank of America employees overall gave more money to Democrats, while Wachovia workers lent more support to Republicans, the analysis showed. At both banks, Giuliani was No. 2 in donations and Clinton No. 3.Former N.C. Sen. John Edwards was an also-ran at both institutions.At Bank of America, the state of New York had the most givers, followed by Delaware and North Carolina. At Wachovia, N.C. residents led colleagues in New York and California.The candidate who received the most money from both banks was Obama, with $120,180 -- about two-thirds from Bank of America employees. A trio of Obama supporters with ties to Bank of America helped arrange a fundraiser here in April, said Eric Montgomery, an attorney at the bank.Montgomery, a Charlotte native who has been active in local politics, said he was already interested in the campaign when he got an e-mail from a fellow employee, Andrew Pittman. They teamed with Susan Higgins, who knew Obama from Harvard University, to help arrange the fundraiser at the Charlotte City Club. Higgins' husband, Chris, works at the bank.Montgomery, 42, said his backing of Obama was a personal preference not tied to his job.The Illinois senator "brings a fresh perspective about what he would do as president," Montgomery said. "He certainly represents a different part of America. He is more ingrained with the common man."Not much from PACsIndividual contributions far outweighed donations by the banks' political action committees, or PACs. That's because there are more individual donors, and PACs typically wait until the field has narrowed. Some candidates also don't accept PAC money.In this year's campaign, Bank of America's PAC gave $10,000 to Democrat Chris Dodd and $5,000 to Democrat Joe Biden, according to the data. Bank spokeswoman Shirley Norton said it's not unusual for the company's PAC to support sitting senators. Dodd, of Connecticut, chairs the Senate banking committee; Biden represents Delaware, where the bank's credit card unit is headquartered.Wachovia's PAC made no contributions to presidential candidates, according to the data.The biggest individual giver was Bruce Hammonds, president of Bank of America's credit card unit. He was previously chief executive of Delaware credit card giant MBNA, which Bank of America acquired last year. MBNA has long been known as a large giver to political campaigns.Hammonds and his wife, Sandra, spread their contributions among Delaware's Biden ($9,200), Clinton ($9,200), Dodd ($2,300) and Giuliani ($2,300). Donors can give $2,300 for the primary and $2,300 for the general election to each candidate.At Wachovia, the biggest contributor was Rob Verrone, a New York-based executive in the company's corporate and investment banking unit. He gave $4,600 to both Giuliani and Clinton.Among chief executives, Bank of America's Ken Lewis, a Bush contributor in 2004, was not a donor, according to the data. His seven top executives made donations to Dodd.Wachovia CEO Ken Thompson and his wife, Kathylee, gave $2,300 each to John McCain. The bank's chief risk officer, general counsel, government relations head and investment banking head also gave to McCain. Thompson, a top fundraiser for Bush last year, declined to comment.Arrington, the UNCC professor, said chief executives can influence a company's political views, even if there is no overt direction to donate. He noted that Lewis' Bank of America predecessor, Hugh McColl Jr., was well known for his Democratic leanings."When the top dog is giving to a political candidate, that will sway a lot of people," Arrington said. "It's part of being on a team."'08 presidential contributionsIndividual contributions by bank employees, plus spouses: BANK OF AMERICA• Democrats: $253,980 (62 percent)• Republicans: $153,950 (38 percent)WACHOVIA• Republicans: $134,800 (57 percent)• Democrats: $102,900 (43 percent)SOURCE: Center for Responsive PoliticsBanking on the next presidentHere are the candidates receiving checks from employees at Charlotte's banks and spouses:
  Bank of AmericaCandidateWachovia