This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Angry Nuns Get All Up in Citigroup's Grill

NEW YORK ( TheStreet) - An asset-management firm speaking for monastic nuns -- and an employee pension plan -- have called for the break-up of Citigroup (C - Get Report).

Trillium Asset Management, on behalf of the Benedictine Sisters of Mount St. Scholastica, along with the Afscme Employees Pension Plan, are asking the bank to explore a break-up as the stock has consistently traded below book value.

The bank's failure to win regulatory approval to return capital earlier this year was also cited as a reason.

"Despite some positive steps taken since the start of the financial crisis, we believe Citigroup's progress toward simplifying and de-risking its business has been slow and incomplete. Citigroup boasts many attractive attributes, but remains burdened by excessive complexity, as well as the stigma and risks associated with being named a 'too big to fail' institution," said Matthew Patsky, CEO of Trillium Asset Management in a statement. "These factors could threaten stockholder return through breakdowns in risk management, increased regulatory scrutiny, higher litigation expense, greater capital requirements and poor public perception, among other challenges."

The sisters' web sit describes their mission as including a "thirst for justice and peace [that] focuses on works of charity as we respond to the root causes of injustice."

"There is a gap of almost $50 billion between what Citi says its assets are worth and what the market is saying," said Lee Saunders, Chairman of the AFSCME Employees Pension Plan's Board of Trustees. "It is high time that the board gave shareholders a plan for recovering this value."

Other banks including Bank of America (BAC - Get Report) and Goldman Sachs (GS - Get Report) also trade below tangible book, which has led some analysts, notably CLSA's Mike Mayo, to believe that big banks should consider splitting up.

Speculation that Citigroup might consider spinning off more units or accelerate the wind down of its bad bank Citi Holdings has increased since the sudden departure of CEO Vikram Pandit.

Newly appointed CEO Mike Corbat, an old Citi veteran, has said that the bank will remain on its current path. However, analysts believe the bank might be able to win regulatory approval more easily under Corbat's leadership.

Shares of Citigroup were rising .55% in premarket trading at $36.36.

-- Written by Shanthi Bharatwaj in New York.
Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
BAC $17.02 0.77%
C $55.30 0.77%
GS $209.44 0.86%
AAPL $125.71 0.95%
FB $86.35 0.64%

Markets

DOW 17,676.63 +80.28 0.46%
S&P 500 2,065.13 +7.49 0.36%
NASDAQ 4,983.0070 +24.5390 0.49%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs