Citigroup (C) is holding meetings with analysts today, coming at a time of extreme uncertainty about its future. In addition to the possibility of imminent nationalization, there’s the brokerage JV with Morgan Stanley and the plan to split itself into two companies (Citi and Shitty).
Heidi N. Moore at Deal Journal has been liveblogging Pandit’s presentation. For the most part, it doesn’t sound like there are any major revelations. Pandit laughed off the plane scandalette and reiterated some common themes about adapting in a time of great change.
Here’s what he said on issues surrounding capitalisation:
12:53: Regulators believe that banks are well-capitalised. Pandit dismissed TCE, or tangible common equity, as a way to measure the health of banks. The more accurate number, he argues, is Tier 1 capital, which is the regulatory capital and is not as dependent on stock prices. He says the entire banking sector is essentially well-capitalised for business if you look at Tier 1. “When a bank is forced to raise additional common equity, it creates what I call a negative feedback loop,” he maintains. “Breaking this feedback loop,” he says, is in the interest of customers, regulators, shareholders and pretty much America itself.
Shares of Citi are up over 6% today.