Citigroup says the terrorist attack on the World Trade Centre will cost it up to $700 million in insurance claims and lost business.
The banks says it expects earnings for the third quarter of 2001 to exceed the First Call consensus estimate of $0.75 by $0.02 per share, excluding the financial impact of the September 11th terrorist attack.
Citigroup anticipates that losses related to the payment of insurance claims, including claims on property in lower Manhattan, business interruption insurance claims, workers compensation exposure and life insurance claims could total $500 million, after tax, or approximately $0.10 per share. In addition, the company expects that the impact of the closing of the stock exchange as well as a number of branches for much of last week would reduce earnings by $100 million to $200 million after tax, or $0.02 to $0.04 per share.
"No monetary costs can compare with the human tragedy that our country experienced last week. However, as we begin to assess the damage incurred and the ensuing costs, we felt it important to give our shareholders an initial estimate of the financial impact on our company," says Sanford Weill, chairman and CEO of Citigroup.