Citicorp to increase loan loss reserve

Press, 21 May 1987, Page 23

Citicorp to increase loan loss reserve

NZPA-Reuter New York Citicorp, the United States’ largest bank, will add SUS 3 billion to its loan loss reserve, nearly tripling the size of the fund that covers bad debts. It said this would mean a loss of SUS2.S billion for the company in the second quarter. Chairman, Mr John Reed, told a news conference that the loan loss addition would keep the company in the red for all of 1987, estimating the loss at SUSI billion. Citicorp, which has taken a firm line on Third World debts, previously had a loan loss reserve of

SUSI. 7 billion. Mr Reed said the decision followed a review by

Citicorp’s board of directors of the global credit situation and of the bank’s loans to developing nations. He said Citicorp felt it was appropriate to raise the loan loss reserve because it is the largest bank lender to most of the major less-developed debtor nations. According to its 1986 annual report, Citicorp had roughly SUS 4.6 billion of loans outstanding to Brazil at the end of last year, SUS2.B billion to Mexico, SUSI. 4 billion to Argentina and SUSI billion dollars to Venezuela. He stressed that this was Citicorp’s own initiative and was not dictated by regulators or accountants.