US banking giant Citigroup said it had 1.4 billion dollars in direct exposure to Netherlands-based chemical giant LyondellBasell.

LyondellBasell,the world's third-largest petrochemical company, had its US operations file for bankruptcy protection this week.

In a statement late Thursday, Citigroup said the charge is mainly to boost loan loss reserves. It said it ended December with about $2 billion of gross exposure to LyondellBasell, mainly in the bank's institutional clients group.

Citi said that LyondellBasell had an estimated pre-tax impact of 1.4 billion dollars in the fourth quarter, after already taking about $600m in write downs and reserves over the past few months.

Due to closing and other adjustments there could be a difference between the final impact of Citi's fourth quarter financial results and the impact disclosed.

Citigroup is the first major financial institution to indicate how much of an impact the collapse of the third largest chemical group in the world would have on its accounts.

Swiss bank UBS had recognized Wednesday that it would face losses from LyondellBasell's collapse, although it refrained from indicating the amount of the loss.

Investment Citigroup