Famed bank analyst Meredith Whitney made a name for herself four years ago when she said Citigroup would have to cut its dividend.
Today, she was on CNBC talking about Citigroup again.
In an interview with Maria Bartiromo, Whitney discussed the results of the Fed’s bank stress tests that were released yesterday.
Whitney said she didn’t think the results of the tests were that surprising, echoing what many on Wall Street have said. But she also spent a lot of time discussing the results of Citigroup, the biggest and most notable of the financial institutions that failed the stress test.
Citi’s failure, however, wasn’t surprising or a big deal, Whitney said, adding that the results doesn’t “change the game” as the bank has not been investable for four years.
“Citi–they don’t have any earnings power, it’s so difficult to move that ship,” she said. “They’re investing in a lot of regulatory processes, but it’s like the old broken-down Victorian house. You have to put so much money in to get to a modern equivalent of a new house. Their investment span is prohibitive, it’s not that exciting… from an investment scenario. People were way too optimistic about citi being able to earn a lot.”
“What would it take for you to invest in Citi,” asked Bartiromo.
“A new brain,” Whitney answered.
When Bartiromo asked if that meant a new CEO, Whitney laughed it off, saying “No, they’re stuck with what they have. It’s just not going to happen in my lifetime.”
Will Vikram Pandit outlive Whitney? Probably not. Either way, Whitney won’t be singing any praises for Citi anytime soon.
Here’s the clip from CNBC: