Citi To Merge
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Citi's CEO confirmed that the company would ditch around $400bn in assets during the next 3 years, describing 22% of the assets on Citi's balance sheet as 'hobbies'. Pandit said that the firm's return to profitability will come about through 3 main phases - 'get fit', 'restructure' and then 'maximize'.
Pandit also surprised his audience by admitting that the company has some 25,000 employees in 16 database centres, when the firm probably needed just two or three. He said that 'in a sense, the 1998 merger (which created Citigroup) was never completed. We're finally going to merge it all'.
The investment banking unit is clearly under some pressure, and is currently taking big hits in terms of job losses. Pandit is clearly committed, however, to this business and acknowledges that things will be tough over at the unit for the next couple of years. Having said this, he is ultimately seeking a return-on-equity from the investment bank in the order of 18% - 20%.
Finally, The Independent reports that Citi is to wind down Nikko Principal Investments (NPI), its UK and Australian-based private equity business. Unit CEO Brian Berry is said to have left last week, having failed in a bid to buy the business. The newspaper quotes an unnamed insider who said that 'we think NPI will appoint a small team to run off the business by spinning out the portfolio companies'.
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