Stress test failure Citigroup (C) needs $10 billion more in capital say regulators, according to WSJ.
Under the best case scenario, the megabank has a razor thin $500 million capital cusion. That tells you something right there. And of course, the company is already a double recipient of TARP capital.
Meanwhile, the bank continues to appeal and dispute the findings, arguing, among other things, that the government’s pessimistic outlook of credit card defaults is out of line.
Oh, and for some perspective: Citigroup’s market cap is only $16 billion these days, so a $10 billion raise is a huge amount that would be both difficult to come by and dilutive to shareholders.
But surely it’s all baked in.