Citigroup Inc and Merrill Lynch & Co Inc are in discussions to receive more capital from investors, primarily foreign governments, The Wall Street Journal reported on Thursday.
Citigroup could get as much as $10 billion, likely all from foreign governments, while Merrill is expected to get $3 billion to $4 billion, much of it from a Middle Eastern government investment fund, the report said. The report also said Citigroup's board is expected to discuss cutting the firm's dividend in half, a move that could save it more than $5 billion a year.
Representatives were not immediately available for comment at either bank. US banks have been wrestling with huge subprime mortgage losses, prompting some to seek cash from sovereign wealth funds.
In December, Merrill Lynch shored up its capital base by as much as $7.5 billion after selling a stake to a Singapore government investment fund and an asset manager. Morgan Stanley has said it would receive $5 billion from China after recording $9.4 billion of writedowns.
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