The following was submitted by my loan officer, Dennis Horman, with Fidelity Mortgage Capital:
"Citigroup announces $400 billion is on the block.
Citigroup the banking icon said it will eliminate non-core businesses over the next two to three years. Its CEO (Pandit) said it is all about getting fit in the financial world.On Friday May the 9th the beleaguered banking icon said it will unload $400 billion in assets over the next few years as it aims to try and reinvigorate itself. The announcement came during a company investor and analyst conference.
Pandit announced that divisions that had not been producing acceptable returns for the group would be sold or let run their course and then be phased out. The company identified roughly $500 billion in non-core assets equaling 22% of the company. It wants to downsize those assets to roughly $100 billion over the next few years.
The group said it is committed to the company's universal bank model despite calls by critics to break the firm up. We believe the right model is a global universal bank, said Pandit. He believes this is the model that delivers the most shareholder value.
Just last week, Citi and State Street Corp. announced plans to sell CitiStreet, a joint venture by the two firms, for $900 million. Lat month, Citi announced the sale of its commercial lending and leasing business to General Electric and plans to get rid of its Diners Club International.
The company also said it is aiming for 9% revenue growth going forward, after suffering through what has been one of the toughest periods of the firm's 196 year history.
Citi ended 2007 by posing a $10 billion fourth-quarter loss- the worst ever in its history. Citi followed that with a loss of $5.1 billion last month."
Dennis Horman, Fidelity Mortgage Capital, 314-974-4887, dhorman@fidelitymortagecapital.com
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