Citi Shedding $400 Billion in Assets
Updated from 3:57 p.m. EDT
Citigroup
(C) - Get Report
plans to shed $400 billion in additional businesses over the next three years, as CEO Vikram Pandit continues his shakeup of the troubled bank.
At Citi's Investor/Analyst Day in New York Friday, Pandit, on stage with a group of the bank's top managers announced no plans to break up the behemoth bank, as some have called for. He said, however, the bank will focus on paring non-core "legacy assets" -- including real estate, leveraged loans and subprime collateralized debt obligations -- to lower costs and boost flagging profits.
"We have made a decision about the assets we want to keep," Pandit told the group of analysts, institutional investors and media in attendance.
The executives expressed confidence that they will be able to carry off the sales.
Citi already has begun shedding assets. Earlier this month, the bank and partner
State Street
(STT) - Get Report
sold employee benefits joint venture CitiStreet
to
ING
(ING) - Get Report
for $900 million.
Pandit has suggested since he assumed the bank's top post in December that he would look at asset sales and he has followed through in recent weeks with a
to refocus the bank's leaders on its core business.
In identifying areas for growth, Pandit and the other top executives in attendance stressed Citigroup's strength in emerging markets countries. "We have an emerging markets platform others dream about," said John Havens, CEO of Citigroup's institutional clients group.
As he fielded some tough questions from the investors and analysts on hand, Pandit tried to add moments levity to the proceedings. When Morgan Stanley analyst Betsy Graseck made a reference to "excess capital," Pandit quipped, "Betsy, let me just start by saying its nice to hear for a change that there are people who think we have excess capital."
It all comes as the bank has been one of the hardest-hit Wall Street institutions during the credit crunch that has gripped markets since last summer. Citi in April
reported a $5.1 billion first-quarter loss
and $12 billion in writedowns of securities tied to shaky debt.
The bank also has raised more than $40 billion through sales of common and preferred stock and slashed its dividend to preserve capital.
Washington Mutual
(WM) - Get Report
,
Wachovia Bank
(WB) - Get Report
and
National City
(NCC)
have also raised capital after posting first-quarter losses.
Rivals
Wachovia
(WB) - Get Report
,
Merrill Lynch
(MER)
and
UBS
(UBS) - Get Report
have also reported huge losses and writedowns in the quarter.
Shares of Citigroup closed down 2.3% $23.74.