BANKING & FINANCE - July 13, 1991

Citicorp’s Bad Loans Are Higher Than Forecast: Chairman John Reed told those at an internal meeting this week that the number of bad loans in the New York bank’s corporate finance sector this year is 25% higher than had been anticipated. Reed said the sector had budgeted $1.28 billion in 1991 for writeoffs and the cost of carrying repossessed real estate. Indications are that the credit bite is running at an annual rate of $1.6 billion, Reed was quoted as saying. Analysts said the credit costs will mean continuing high loan loss provisions, which bite into earnings. Citicorp earned $70 million in the first quarter. Analysts expect lower results when the company reports second-quarter earnings.