NEW YORK — When Citigroup warned in early November that it was likely to write down its portfolio by $8 billion to $11 billion in the fourth quarter because of exposure to bad loans, investors recoiled at the size of the losses. Some now say those early estimates appear drastically understated.

Citigroup Inc. could write off as much as $18.7 billion in the fourth quarter, wrote Goldman analysts William F. Tanona, Betsy Miller and Neil C. Sanyal in a note to investors late Wednesday. If it does, they say, the bank may be forced to lower its dividend by 40 percent.

Citi has about $55 billion in exposure to subprime mortgages, about $43 billion of which is collateralized debt obligations, or CDOs, that have mortgages underlying them.

"We still believe it will be a couple of quarters before the current credit crisis is fully digested by the markets," the Goldman analysts wrote.

Already, Citi has been propped up by a $7.5 billion investment from the Abu Dhabi Investment Authority, a sovereign wealth fund that in late November bought a 4.9 percent stake in the bank.

But if Citi must write down the value of its portfolio by more than it estimated back in early November — a distinct possibility, given the lack of improvement in the tight credit markets — Goldman analysts said the bank may need to raise an extra $5 billion to $10 billion in cash.

When Citi said Nov. 4 that its write-down could be between $8 billion to $11 billion, it acknowledged the value could end up being larger. Citi said at the time it would not revise its estimate throughout the fourth quarter as credit conditions change, and spokeswoman Shannon Bell said yesterday the bank does not comment on analyst reports.

Citi shares fell 89 cents, or 2.9 percent, to close at $29.56 yesterday. They have tumbled about 45 percent since the beginning of the year.

A dividend cut is a possibility facing many banks wrangling with their losing investments in subprime mortgages. UBS recently replaced its 2007 cash dividend with a stock dividend, in a cash-raising effort that also included selling a $9.75 billion stake to a Singapore fund, borrowing about $11.5 billion from outside investors and selling treasury shares.

CIBC World Markets Corp. analyst Meredith Whitney has said for months that Citi's dividend should be on the chopping block. Earlier this month, she wrote that along with cutting the dividend, Citigroup should raise at least $30 billion in additional capital and sell at least $100 billion in assets.

Citi's board has said it intends to maintain its dividend, but the new CEO, Vikram Pandit, did not rule out a dividend cut when asked about it on Dec. 11. He also did not rule out more asset sales: "I will undertake an objective and dispassionate review of all the businesses, individually and in aggregate, to make sure we are properly positioned for the future," Pandit said at the time.

Citi has gone through quite the overhaul since the summer. In early November, Citi ousted Chief Executive Charles Prince. About five weeks later, the bank replaced him with Morgan Stanley alum Pandit. Pandit had been in charge of Citi's investment banking, which has recently been restructured.

Citi has shuffled out other high-level employees, too, but has not announced a big round of layoffs.

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