Bank stock dividends on the cutting board?

As if investors in bank stocks haven't suffered enough for management's miscues: Next up may be a rash of dividend cuts.

Analysts at brokerage Oppenheimer & Co. on Friday added to the renewed gloom about financial stocks with a report that predicted dividend cuts in April by Citigroup Inc., Wachovia Corp. "and likely others."

The report said several big banks "are dangerously approaching earnings levels that simply will not support such high relative" dividends.

Citigroup already has cut its dividend once because of mounting losses on mortgage-related debt. That cut, in January, reduced the annual payout to $1.28 a share from $2.16.

Wachovia’s annual dividend is $2.56 a share, which yields a whopping 9.8% at the stock’s closing price on Friday. That kind of stratospheric yield is a clear sign that many investors figure a cut is coming -- even though Wachovia Chief Executive G. Kennedy Thompson told analysts in January that the payout was safe.

The action in the stock on Friday suggested investors weren't buying Thompson's previous optimism: Wachovia shares sank $1.08, or 4%, to $25.99, barely above the seven-year closing low of $25.60 on March 17. Citigroup fell 96 cents, or 4.4%, to $20.83. Citi’s shares also reached their recent low on March 17, when they closed at $18.62.

If financial stocks are heading to new lows, they could threaten the turnaround in the stock market overall as well.

An index of 92 financial stocks in the Standard & Poor's 500 index rebounded 11.9% the week of March 17, after Bear Stearns Cos. averted collapse by agreeing to an emergency takeover by JPMorgan Chase & Co.

But the financial index plunged 7% last week to finish at 331.75. That left it just 5.8% above the five-year low of 313.62 it reached March 17.