Citigroup Inc. could suffer nearly $180 million in losses on loans extended to an Asian hedge fund after the fund's foreign-exchange bets went bust, Bloomberg News reported on Dec. 18, citing sources familiar with the matter.
The company is said to be in talks with the fund, which is managed by a unit of GF Holdings (Hong Kong) Corp. Ltd., over the positions and their valuation and the company's board is also looking into the issue.
The final amount of the losses is subject to the company's talks with the fund as well as the unwinding of the trades, the report said.
In addition, Citigroup is shaking up its prime brokerage business by pulling the foreign exchange prime brokerage unit out of the currency trading division and placing it under the prime finance and securities services division. The reorganization comes as part of the company's expansion of its prime finance business, according to the report.
Also, Sanjay Madgavkar, head of the company's foreign exchange prime brokerage unit, is reportedly leaving the company and will be replaced by Chris Perkins, head of the company's over-the-counter clearing business.
GF Holdings CEO Tang Xiaodong, Citigroup spokesman Scott Helfman and Madgavkar declined to comment on the matter, the report added.