Citigroup Inc. yesterday announced significant declines in the fair value of the approximately US$55 billion in U.S. sub prime related direct exposures in its securities and banking (S&B) business. Additionally, chairman and CEO Charles Prince said he’s taking early retirement.

Citi estimates that, at the present time, the reduction in revenues attributable to these declines ranges from approximately US$8 billion to US$11 billion (representing a decline of approximately US$5 billion to US$7 billion in net income on an after-tax basis).

These declines in the fair value of Citi’s sub-prime related direct exposures followed a series of rating agency downgrades of sub-prime U.S. mortgage related assets and other market developments, which occurred after the end of the third quarter, it said. The impact on Citi’s financial results for the fourth quarter from changes in the fair value of these exposures will depend on future market developments and could differ materially from the range above.

Citi also announced Sunday that, while significant uncertainty continues to prevail in financial markets, it expects, taking into account maintaining its current dividend level, that its capital ratios will return within the range of targeted levels by the end of the second quarter of 2008. Accordingly, Citi has no plans to reduce its current dividend level.

The board of directors of Citigroup also announced that Robert Rubin, chairman of the executive committee of Citi and a member of the board, will serve as chairman of the board. In addition, Sir Win Bischoff, chairman of Citi Europe and a member of Citi’s Business Heads, Operating and Management Committees, will serve as acting CEO. The board has designated a special committee consisting of Rubin, Alain Belda, Richard Parsons, and Franklin Thomas to conduct the search for a new CEO.

Prince commented, “We have made strong progress in our strategy for building for the future, evidenced in the momentum we have achieved in most of our businesses. Nevertheless, it is my judgment that given the size of the recent losses in our mortgage- backed securities business, the only honorable course for me to take as chief executive officer is to step down. This is what I advised the board.”