New York: Bogged down by mounting losses, the Citigroup is speeding up efforts to dismantle various parts of the banking behemoth and shrink the company by one-third, say media reports.
Vikram Pandit-led Citi has been in the eye of a financial storm in the wake of credit crisis, forcing the US Federal government to throw two lifelines worth over $45 billion to the company.
The New York Times quoting two persons with the knowledge of the plan has reported that the Citi is planning to split itself into two, under pressure from Washington and Wall Street.
Citi, which is scheduled to report its quarterly results next week, is widely expected to post a $10 billion operating loss for the fourth quarter.
“Federal regulators have been pressing Citigroup to clarify its strategy, shore up its finances and shake up its board,” the daily said quoting two persons briefed on the situation.
Quoting people familiar with the bank, The Wall Street Journal has said the banking behemoth would soon announce a plan to shed a host of businesses and “shrink itself by one- third.”
“Citi will soon announce a drastic plan to shed a host of businesses and shrink itself by one-third, say people familiar with the bank, which its executives say will essentially dismantle the financial colossus built by legendary deal maker Sanford Weill,” the report noted.
On Tuesday, Citi said it would split Smith Barney retail brokerage into a joint venture with Morgan Stanley.
“Citigroup will also announce steps to shed two consumer- finance units and the company’s private-label credit-card business, and scale back on the trading the company does on its own behalf,” The Wall Street Journal said.