Goldman Sachs researchers have decided that Citigroup (C) could lose another $9 billion in the second quarter. The big money center bank does not have that kind of capital on hand.

According to Reuters, Citi "may incur second-quarter write-downs of $9 billion and raise additional capital, said a Goldman Sachs analyst, who now expects a loss for the bank for the period."

If the dynamics of Citi’s balance sheet look much like Barclays (BCS), that means the US financial firm may have to raise another $10 billion. Both banks have similar exposure to mortgage-back paper and LBO loans.

Citi might be able to bring in $10 billion. It may be at a price below the market. That would dilute current shareholders by as much as 10% and could take Citi’s stock below $15.

Shareholders in the bank have to wonder what happened to Vikram Pandit. He was brought in as the new CEO. He is rarely seen and almost never heard from. Pandit said he would take 20% out of the firm’s operating costs. No much appears to be going on there.

Citi and Barclays. If the rest of the major banks and brokerages look like this pair, the industry is going to have to raise another $200 billion between now and year-end.

Douglas A. McIntyre

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