Citigroup needs its umbrella back. Since it decided to ditch the famous red logo earlier this year, the weather has turned seriously nasty for the bank and Chuck Prince, its bedraggled chief executive.

Citi has a globally diverse business, including a heavy retail banking exposure alongside its Wall Street activities. Yet its shares have fallen 30 per cent this year. That is worse than Lehman Brothers and roughly on a par with Bear Stearns, which was right at the centre of the mortgage storm.

The latest 7 per cent slump in Citi’s shares was triggered by a mixture of further credit market turmoil and concerns about the group’s capital position. The first fear looks on the money, weighing heavily on all banks on Thursday.

Housing fundamentals continue to decline, putting yet more pressure on mortgages and the exotic debt products they were packaged into. Banks, including Citi, that have significant exposure to such products and took writedowns last quarter are almost certain to face more hits.

As for the capital position, Citi’s Tier 1 ratio was 7.4 per cent last quarter, just below its 7.5 per cent target. The other risk-weighted measure it focuses on is further off target. Citi has acknowledged the need to rebuild those ratios through actions such as stopping share buy-backs and reducing some balance sheet positions.

One question, however, is whether the risk-weightings are up with events. With the ratings on mortgage-related instruments being slashed in some cases, even Citi, with its huge balance sheet, could find its ratios affected. That would be exacerbated if any structured investment vehicles were brought back on balance sheet.

With limited disclosure on Citi’s exposure to mortgage instruments, it is tough to guess if such effects could be significant. But, for now, when it comes to mortgage exposure, investors in all financial companies are shooting first and asking questions later.

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