Nov. 1 (Bloomberg) -- Citigroup Inc. may have to cut its dividend, raise cash or sell assets to raise more than $30 billion to shore up its capital, CIBC analysts led by Meredith Whitney wrote in a note to clients dated Oct. 31.

Citigroup, the second-largest U.S. bank, was lowered to ``sector underperform'' from ``sector perform'' by New York-based CIBC World Markets. The ratio of the company's tangible equity to tangible assets fell to 2.8 percent, the lowest in decades and half the average for its peer group, the analysts said.

Citigroup Chief Executive Officer Charles Prince spent more than $25 billion on takeovers since a U.S. Federal Reserve ban on Citigroup acquisitions lapsed in March 2006, the analysts wrote. Citigroup's quarterly profit fell to the lowest in three years after the company said it would take a $5.9 billion hit from credit and trading losses in the three months ended Sept. 30.

``The stock will be under significant pressure and could trade into the low $30s,'' the analysts wrote.

Citigroup's shares closed at $41.90 yesterday in New York. The stock fell to $41.31 as of 9:59 a.m. in Frankfurt.

Whitney and Carla Krawiec cut their expectation of Citigroup's earnings per share for this year to $3.68 from $3.75. They cut their outlook for next year to $4.20 from $4.55.

Citigroup's tier 1 ratio, a measure used by regulators to make sure banks have enough cash to cushion losses, fell to 7.4 percent at the end of the third quarter from 8.64 percent at the same time last year.

To contact the reporter on this story: Sebastian Boyd in London on sboyd9@bloomberg.net

Last Updated: November 1, 2007 05:21 EDT