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Tuesday, October 31, 2006

More Trouble For Citigroup: Goldman Gets Into Loans

Stocks: (GS)(BAC)(JPM)(C)

It looks like Goldman Sachs wants to be your banker, at least if you are in the private equity business. It the recent private equity purchase of Texas Genco, Goldman put up $2.5 billion in loans to the buyout firms involved.

Goldman rank 7th in "top arrangers of high risk corporate loans" for the first three quarters of 2006. That was well below JP Morgan, Bank of America, and Citi. But, with Citi's problems in its retail business, it does not need another headache.

Citi's corporate and investment banking revenues are already under pressure. And, the company's stock performance has hurt the market's belief that management can turn the big bank into an earnings machine.

The contrast in stock prices tells a lot of the story. Over the last six months, Citi's stock is flat. Goldman's is up almost 20%.


Douglas A. McIntyre can be reached at He does not own securities in companies that he writes about.

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