(Dec 6): Citigroup Inc’s losses increased to more than A$70 million (US$45 million or RM198.7 million) after a block trade in Australia went awry, according to people with knowledge of the matter.

Citigroup sold some 22.6 million Goodman Group shares at A$35.35 per share early Friday, the people said, asking not to be identified discussing private information. That represents a loss of about A$49.6 million and adds to the roughly A$27 million hit from earlier in the week.

The US bank had launched a A$1.9 billion sale of 50.4 million Goodman shares for China Investment Corp earlier this week at a fully underwritten floor price of A$37.55, but ended up selling just 23.4 million at the time, Bloomberg reported.

Citigroup undercut rivals to win the biggest block trade in Australia in seven years, only to see the deal unravel. It will represent a big hit to the firm’s Australian investment banking fees at a crucial time of the year, with just three weeks of 2024 remaining.

A spokesperson for Citigroup declined to comment.

Equity capital markets underwriting in Australia earned banks nearly US$500 million in the first 11 months of this year, accounting for more than 23% of total investment banking fees, according to London Stock Exchange Group data. For Citigroup in this market, it has earned US$54.4 million in investment banking fees, of which about US$15 million came from equity, the data shows.

Competition is fierce in Australia as global banks from UBS Group AG to Goldman Sachs Group Inc. and local players including Barrenjoey fight for business. The local investment banking market has handed firms more than US$2.1 billion in fees during the first 11 months of this year, LSEG data showed.

Goodman shares closed 0.85% higher at A$36.57 in Sydney on Friday.

Uploaded by Magessan Varatharaja