Citi CEO Vikram Pandit remains bullish about the prospects of his firm.

Here's what he told his staff after the results of the stress tests revealed that Citi needed to raise an additional $5.5bn in capital:

'As many of you know, the results of the U.S. government's stress testing of 19 bank holding companies, including Citi, have just been released. The world has been anxiously awaiting these results, and I'm glad that they're finally public. In certain respects, this stress test was more critical for us than for others ��" because it created the transparency and confidence that we all need to move forward.

The stress test was rigorous and thorough, and tested all of the banks' ability to weather a significant level of economic stress. As a result of the test outcome, we will implement a relatively small expansion of our previously announced public exchange offer. This expanded offering, along with previously announced actions (including the Smith Barney Joint Venture and the announced sale of Nikko Cordial Securities), are expected to fully satisfy the capital cushion outlined by the stress test results. We plan to launch this exchange offer shortly.

The results of the test validate the strategy and actions we have taken during the last 15 months to get our company fit. As you know, we have moved aggressively, reducing expenses by 25% and headcount by nearly 20% from their peak in 2007. Through your hard work, we have also reduced the balance sheet by 23% from its peak, completed 23 divestitures and sharpened our strategic focus by separating the company into Citicorp and Citi Holdings. You have done all this while remaining focused on our clients and customers, allowing us to maintain the strength of our core franchise.

All of your hard work is what has brought us to this point. I want to thank you for your commitment to the company and for your perseverance over the last 15 months. We had to make a lot of tough decisions and take bold actions. While there are still challenges ahead of us and there is still work to do, the actions we have taken and the plans we have announced, together with the results of the stress test, should put questions about our financial strength behind us.

I look forward to turning the page on this chapter and sharpening our focus on running our businesses, executing our strategy and serving our clients without distraction.

We are getting our house in order, we have clarified our strategic focus through the separation of Citicorp and Citi Holdings - and as I said at our Annual Shareholder's Meeting, I am looking forward to a bold new beginning for our company.

Citicorp's strategy and the direction for Citi Holdings are clear. We are the world's most global bank and we have an enviable global network that is almost impossible to replicate - in both the institutional and consumer businesses. We serve 98% of the Fortune 500 and 99% of the Global Fortune 500. Many of these relationships are built around our unique platform around the world where we're often the only provider with the global capabilities our clients require. Our international consumer banking franchise is unparalleled and we're able to leverage our globality and aspirational brand to retail customers throughout the world.

Building on this strength is what we all have to be focused on.

I want to thank you for all your support and hard work throughout the past year and I'm looking forward to writing the next chapter with you and to a bright future for Citi'.

Source - The New York Times DealBook column

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