Citi’s Pandit defends capital strength: memo

Citi’s Pandit defends capital strength: memo
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First Published: Tue, Mar 10 2009. 02 57 PM IST
Updated: Tue, Mar 10 2009. 02 57 PM IST
London: Citigroup was profitable in the first two months of 2009 and is confident about its capital strength after tough internal stress tests, according to a memo from chief executive Vikram Pandit obtained by Reuters.
Citigroup declined to comment on the memo, sent as an email to colleagues and obtained by Reuters on Tuesday. The memo was accompanied by speaking notes for Pandit.
The memo came after the cost of insuring Citi’s debt against default hit a record on Monday.
In the notes, Citigroup said it was having its best quarter-to-date performance since the third quarter of 2007.
Revenues excluding externally disclosed marks were $19 billion in January and February alone, almost reaching the $21 billion of the first quarter last year.
“That said, we are still one month away from the end of the quarter and market volatility could alter results,” the bank said in the speaking notes.
The memo also said that the bank was confident about its capital strength after it had done stress tests, using assumptions that were more pessimistic than those of the US Federal Reserve.
In the memo, Pandit said he was disappointed with Citi’s stock price and “broad-based misperceptions about our company and its financial position”.
“We believe our credit spreads are disconnected from our condition and are inconsistent with the government’s announcements regarding support for the financial system.”
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First Published: Tue, Mar 10 2009. 02 57 PM IST
More Topics: Citigroup | Vikram Pandit | Profit | Shares | Recession |