Citigroup (NYSE:C) is having a garage sale. Actually the sale has been going on for a long time. The problem is that no one is stopping by.
Citigroup tried to be so big and powerful in the 90’s and early 2000’s. They got their hands into everything and anything, and have made a complete mess of it all. Personally, I would put Citigroup’s responsibility in the entire financial disaster at about 20%. That is a lot when taken in context of all the banks and other Wall Street firms that have contributed to the meltdown.
Citigroup has had a long list of CEO’s that ran the company into the ground. Even Vikram Pandit, the current CEO is out of touch with reality. Forget about too big to fail, Citigroup qualifies as a company too stupid and arrogant to survive.
Citigroup is attempting to sell it’s credit card business, mortgages, brokerage operations, a door-to-door insurance business, and a ski lodge it owns. Many of the products and services it had hoped would make the company the financial superpower of the world.
Now that the dream is gone, the New York company is working hard to get rid of assets it no longer wants, still haunting Citigroup more than two years after the financial crisis hit. Fourteen months into the sales process, though, it is clear executives are in for a long, hard slog.
Citigroup, the third-largest U.S. bank-holding company by assets behind Bank of America Corp. and J.P. Morgan Chase & Co., has shed just one-fourth of the roughly $715 billion in assets it moved into a unit called Citi Holdings in January 2009. Citigroup’s overall asset size as of Dec. 31 was down 4.2% from a year earlier, to $1.86 trillion, compared with J.P. Morgan Chase’s 6.6% decline.
The slow-moving merchandise is making it harder for Citigroup Chief Executive Vikram Pandit to turn around the company’s bottom line, frustrating some investors. Analysts expect core businesses to churn out an impressive $16 billion in profits this year, but credit losses on the garage-sale assets likely will hit $13 billion.
That would give Citigroup its first full-year profit since 2007, but nowhere near the $21.54 billion it made in 2006.
The company’s strategy seems to be that "we’ll ride it out, and it will get better eventually," said Moshe Orenbuch, a bank analyst at Credit Suisse Group. Some investors want "to see more urgency on their part." Regulators also are pressing Citigroup to move quickly, according to people familiar with the matter.
Mr. Pandit told analysts and investors this month that the company "will continue to reduce Citi Holdings over time through business dispositions, asset sales and organic run-off." While more than 15 businesses have been sold, dumping the rest likely will take at least until the end of next year, executives said.
Extricating the company from its past mistakes is a major part of Mr. Pandit’s campaign to convince skeptics on Wall Street and in Washington that there is no need for a forced dismemberment of Citigroup. […] (WSJ)
An orderly dismemberment of Citigroup is exactly what should be done. To the point where nothing is left of the worst bank in modern times.
I have received many emails over the past 18 months or so from individuals sharing their own experience dealing with Citibank and/or Citimortgage. Not one of them was favorable of the company. From customer support calls being routed to Singapore or other off shore Countries, no follow-ups on mortgage workouts, claims of lost documentation, and a never ending routing from one person to another. Why anyone still banks with this filth of a company is beyond me.
For me I use a credit union and a small regional bank, and have been happy with them ever since. Consider moving your money away from the big blood suckers into a credit union or small regional bank that is safe. The move your money campaign provides links regional banks safety ratings.
Remember the “Move Your Money” campaign is still alive and well!
