It's the end of the line for Citigroup. The "group" will soon be gone as Pandit Dismantles Weill Empire to Salvage the Bank Within Citi.



Vikram Pandit is unraveling his empire to save his bank. Citigroup Inc.’s chief executive officer said yesterday he would cede control of the Smith Barney brokerage to Morgan Stanley. Pandit may also dump the CitiFinancial consumer-lending unit, tag Tokyo-based Nikko Asset Management Co. for eventual sale and rein in trading with the bank’s own capital, people familiar with the matter said.



Some current and former Citigroup executives place the blame for the firm’s troubles on Weill. He refused to spend enough on technology and failed to integrate the new companies he acquired, say people familiar with the matter.



“Each business has been operating with its own back office,” Pandit told investors and analysts gathered in New York on May 9. “We have 140,000 people in IT and operations. We have 16 database standards. We have 25,000 developers. This results not only in waste but doesn’t give us any opportunity to leverage our organization. That’s massively inefficient. We’re finally going to merge it all.”

Goodbye Citigroup, Hello Citibank.

Kiss Citigroup goodbye, at least as you now know it.

Let's see if Citigroup's card unit is next on the block.

Let's also watch how many heads roll in a sale of Smith Barney to Morgan Stanley.

Citigroup IT jobs At Risk

Capital Drought

Time and again, big banks such as Citigroup Inc. argued that irrational and seized-up markets, not the woeful state of their balance sheets, were to blame for convulsing share prices.



For more than 18 months, the government went along with that thinking. Instead of demanding that banks recognize their losses, overhaul operations and quickly raise equity from private sources, regulators bet a flood of money would unclog credit markets.



When that didn’t work, the government doled out billions of dollars to more than 100 banks through the Troubled Assets Relief Program, or TARP, again with few demands that banks take harsh medicine. That hasn’t done the trick either.



The reason is pretty simple. This has never been a liquidity crisis. It’s a capital crisis. Namely, investors don’t think banks have enough of it, especially when it comes to tangible common equity.



Citigroup is a dramatic example. Its tangible common equity was 2.41 percent of tangible assets at the end of the third quarter. That was too low for investors’ liking and below peers such as JPMorgan Chase & Co. and Wells Fargo & Co.

Citigroup's Equity Is A Mirage

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