RENEE MONTAGNE, host:
And the biggest U.S. financial services company, Citigroup, will pull back the curtain on its troubled finances today. The company is expected to say later this morning how much it made during the last three months of the year, and the picture is not likely to be pretty. Citigroup has already acknowledged billions of dollars in losses in the subprime mortgage meltdown, and the company is appealing to foreign investors for new capital.
NPR's Jim Zarroli joins us now to talk more about that. Good morning.
JIM ZARROLI: Good morning.
MONTAGNE: What are people expecting Citigroup to say today?
ZARROLI: Well, this is a day of reckoning for Citigroup. It's going to say how much money it made last quarter. It's also going to give us the latest estimate of how much it lost in the subprime mortgage crisis. And, you know, the estimates are anywhere from $11 billion to $20 billion, maybe even more. It's also going to try to answer the big question that a lot of shareholders have right now, which is how is the company going to get out of this mess. It could announce some job cuts, maybe a lot. There could be a dividend cut. And we, finally, may hear something about Citigroup's capital plans. It's been looking for outside investors. You may remember it got $7.5 billion from the Abu Dhabi Investment Authority last year. So we may see another announcement like that.
MONTAGNE: Jim, remind us how a huge company like Citigroup got into a position where it needs to raise so much money from overseas investors.
ZARROLI: Well, one of the important things is that you have to remember Citigroup is basically a big commercial bank, even though it does a lot of other things. It's still a commercial bank. The federal government says that big commercial banks can do a lot of things like issue loans, but they have to keep a certain amount of capital on reserve to back them up.
Now, for a long time, Citigroup has been using the money it has for mergers, for stock buybacks, for lots of different things and it basically kept the minimum amount of reserves on hand. So when these mortgages losses started coming in, it didn't have a lot of wiggle room. So it had to raise money to keep the regulators happy.