Citigroup said its employees didn’t go beyond the bank’s risk limits with loans to an Asian hedge fund that hurt fixed-income results in the fourth quarter.
Bloomberg News reports that the bank indicated that it took a charge of $100 million to $200 million for losses tied to the loans. Chief Financial Officer John Gerspach told reporters on a conference call Monday that the loss hasn’t been realized yet, and some of the charge may be reversed. The loans were made in accordance with Citigroup’s risk appetite, he said.
“We are a bank, we do take risk and, at various points in time, there are losses associated with the risk that we take,” Gerspach said on the call. “We’ve had these situations in the past. I can’t predict how this one is going to turn out.”
Citigroup faces losses of as much as $180 million on loans made to the hedge fund.
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