Citigroup came under heavy selling pressure on Wednesday as its shares plunged to a 13-year low amid fears over its ability to withstand expected writedowns on mortgage-backed assets. Citi led a widespread retreat in the financial sector as share prices fell for most banks and the cost of insuring their debt against default rose. Citi shares slid more than 23% to $6.40, bringing its market value to just $34.8bn, less than its smaller rival US Bancorp. The stock is now trading at about a third of the bank’s book value, a level that will add even more pressure on Vikram Pandit, chief executive, who has failed to revitalise Citi’s shares and earnings. In a statement, Citi, which announced Wednesday it would buy back $17.4bn in off-balance sheet securities for a loss of $1.1bn, sought to reassure the market that its plan to sell assets, reduce costs and cull employees would pay off, saying it had “strong capital and liquidity positions and a unique global franchise”.
