Speaking in front of Congressmen last week, Citi (C) CEO Vikram Pandit explained the problem with the market for toxic assets: He wasn’t willing to sell at current market prices, considering levels to be way too low. So, impasse.
And that’s the problem with the company’s efforts to undo the financial supermarket. The units it wants to sell, the crappier ones, nobody wants to buy. For example, the company might find a buyer for its Mexican unit (which it denies is fore sale), but says NY Post:
Problem is, the old Golden State assets and Banamex have been ring-fenced into Citi’s so-called good bank, Citicorp, which contains assets and businesses that the hobbled banking giant wants to keep.
Meanwhile, the assets that make up Citi’s so-called bad bank, businesses that are seen as non-core and are at the heart of a strategy to raise much-needed capital, are garnering little interest, investment bankers told The Post. The assets include CitiFinancial, CitiMortgage and Primerica, which has been for sale for more than a year.
Sources said those businesses aren’t drawing buyers because they are in sectors that face the strongest headwinds these days.