In the absence of any kind of turnaround, Citigroup (C) is desperately trying to slim down and raise cash. Smith Barney may soon be sold, as well as its Mexican bank Banamex.
In the meantime, gigantic losses
WSJ: Citigroup is expected to post an operating loss of at least $10 billion when it announces fourth-quarter results on Jan. 22, say people familiar with the matter. This figure could change, they cautioned, as executives finish tallying the numbers. Citigroup’s quarterly net loss will be closer to $6 billion, due to a one-time gain of roughly $4 billion from the sale of its German retail-banking business, a deal that closed late last year.
Such a loss would be far worse than the $4.1 billion that Wall Street analysts are projecting. It is unclear whether the analysts’ projections accounted for sale of the German business.
Meanwhile, the Citi board has “full confidence” Pandit, whatever that means.
We like Felix’s take:
Remember Jack Flack’s five levels of CEO hell? The fourth (“On The Ropes”) is when the board starts expressing confidence in the CEO; the fifth (“Dead Man Walking”) is “when the corporate flacks, who are typically the staunchest of the palace guard, refuse to comment instead of denying the fragility of their CEO’s job”. At that point, says Mr Flack, “the game is over”.
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