Capital One, a credit card issuer in the US, cut earnings in a call today:
The company said it now expects charge-offs of about $5.9 billion in 2008 amid expectations that the U.S. economy will be weaker. That’s up from the $4.9 billion to $5.5 billion Capital One predicted in November.
The warning comes on the heels of Countrywide Financial Corp.’s disclosure Wednesday that the percentage of borrowers who missed payments on home loans last month rose. The nation’s biggest mortgage lender said some 6.96 percent of the loans in its servicing portfolio were delinquent last month, up from 5.02 percent in December 2006.
And to add to the glory, Merrill Lynch and Citibank are both looking for capital:
Merrill is expected to get $3 billion to $4 billion, much of it from a Middle Eastern government investment fund. Citi could get as much as $10 billion, likely all from foreign governments.
Both Citi and Merrill are scrambling to nail down the details before they report earnings next week that are expected to include additional losses stemming from their exposure to mortgage-related investments. Together, these additional losses could reach as much as $25 billion.
Not very nice to hear, is it? And Ben Bernanke just announced he’ll cut rates again. A rate cut for India soon then?