Citigroup To Shed Nearly $500 Billion In Assets

[Purveyor]

NEW YORK—Citigroup Inc.'s new chief executive, Vikram Pandit, plans to stick with a global banking model after months of intense review—but only after shrinking the company by about one-fifth first.
The three-year game plan, revealed Friday, includes getting rid of more businesses, mortgages, real-estate operations and jobs.

The bank aims to shed between $400 billion and $500 billion of its $2.2 trillion in assets and grow revenue by 9 percent over the next few years as it tries to rebound from massive losses tied to deterioration in the credit markets.

The $500 billion in so-called "legacy assets" the bank intends to sell off or allow to mature include yet-to-be-named noncore businesses, as well as assets in Citigroup's securities and consumer banking segments. That includes mortgages and other real estate-related holdings.
Meanwhile, the anticipated rise in revenue will derive largely from cutting costs—which Chief Financial Officer Gary Crittenden said will mean more job reductions. Citi has so far lowered its headcount by 13,200 since last summer.

The moves could mean the bank loses its standing as the nation's largest if it doesn't grow other assets simultaneously. According to their most recent regulatory filings, Bank of America Corp. has $1.74 trillion in total assets, while JPMorgan Chase & Co. has $1.64 trillion.

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While others agreed that Citi had to sell assets, not everyone was certain how easy such a sale would be.

"I'm not sure they have half a trillion in good assets that someone wants to buy. But they're doing the obvious—they have no choice," said R. Christopher Whalen, managing director of consulting firm Institutional Risk Analytics.

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http://www.montereyherald.com/sports/ci_9204463

[marmar]

1. Why am I getting Enron-esque vibes from Citigroup?

:shrug:

[Vincardog]

3. Because they are a corrupt rancid corporate vampire too.

[Vincardog]

2. Well may be they should not have abused their mortgage holders.

[Blue_In_AK]

4. I hope this means they're going to sell my mortgage

back to my credit union, which is where I had it in the first place. My mortgage has been sold twice since I bought my house in 1990.

[Double T]

5. Another corrupt financial institution is about to collapse; Other than ANOTHER government bailout...

who will be willing to buy Citi's overvalued assets? The bush/cheney GREATEST DEPRESSION continues downward.

[Purveyor]

6. But of course..."Capitalism" in its finest form... "puke"....eom

[ColbertWatcher]

7. Didn't they just get bought out by somebody?

Didn't some country put up a huge amount of cash to cover their debts or something like that?

Oh, wait...

Citigroup announced last night that it was selling a $7.5 billion stake to a Middle Eastern sovereign fund in the latest bid to shore up its balance sheet.

The fund, the Abu Dhabi Investment Authority, has agreed to buy a 4.9 percent equity stake in a complex transaction that has been approved by federal regulators. It will have no role in the management or governance of Citigroup, nor any presence on Citigroup’s board.

Abu Dhabi’s 4.9 percent stake will make it Citigroup’s single largest shareholder, overtaking Prince Walid bin Talal of Saudi Arabia. He has owned close to a 5 percent stake since the early 1990s, when he made a similar investment to bail out the company. Together, their holdings will mean that nearly 10 percent of the Citigroup will be owned by Middle Eastern investors.

--New York Times