BOSTON (Reuters) - Meredith Whitney, Oppenheimer & Co’s banking analyst who was the first to say Citigroup Inc. (C.N) needed to cut its dividend last year, said on Thursday the bank would need to cut payouts again and raise more capital.
Whitney also told television channel CNBC she believes financial stocks, which have been weak recently in the wake of the credit crisis, housing crunch and fears of a recession, could fall at least another 15 percent and as much as 50 percent.
“The best case downside scenario is that there is a 15 percent downside in the financials; worst case is 50 percent downside in the financials,” Whitney said.
Citi has already raised $12.5 billion from foreign funds this year after posting heavy losses last year. It also cut its dividend 41 percent. Citi’s shares have lost a third of their value since Whitney’s call last year.
Reporting by Svea Herbst-Bayliss; Editing by Andre Grenon