Investors brace for bank losses in pivotal week

(Reuters) - Major American banks are expected to unveil substantial losses and secure more cash from abroad in what is shaping up to be a pivotal week for the global credit crisis, with central banks also poised to weigh in again.

Citigroup Inc. (C.N: Quote, Profile, Research) could write off as much as $24 billion and lay off 20,000 workers in a drive to cut costs and boost capital, CNBC said on its Web site in a report dated Sunday.

CNBC said the plans will be unveiled on Tuesday when Citi, the largest U.S. bank by assets, reports fourth quarter results.

Investment bank Merrill Lynch (MER.N: Quote, Profile, Research) is just as troubled.

The Financial Times said on Monday that Merrill was seeking about $4 billion in a second capital raising, and the Kuwait Investment Authority was expected to be a significant investor.

A deal could be announced as soon as midweek, the paper said, citing people familiar with the matter.

The New York Times on Friday reported Merrill was expected to suffer $15 billion in losses stemming from bad mortgage investments, when it releases its results later this week.

 

Read more at Reuters