Citi’s board and upper management is engaged in a brutal battle over the bank’s future. We’re told by a person close to the fighting that chief executive Vikram Pandit is struggling to hold his job while other top executives and board members manoeuvre to unseat him.The situation has been described as chaotic.
“I’d call it warfare but that implies there are two sides. This is more like a circular firing line,” the person said.
One argument that is popular among Pandit’s foes is that he simply has lost the market’s confidence. They believe that regardless of the quality of Pandit’s leadership, it is simply too late to reverse the market’s disapproval. Citi’s stock has been trading the single digits this week.
Pandit has called a town hall meeting for Monday. One colleague dryly noted that they aren’t sure Pandit will be invited to that meeting by the time Monday rolls around. Below is Pandit’s memo (via DealBreaker).
From: [email protected]
Sent: Friday, November 14, 2008 12:48 PM
To: [email protected]
Subject: Global Town Hall on Monday, November 17
Dear Citi colleagues,
Please join me at a Town Hall meeting at 8 a.m. on Monday morning (complete Town Hall viewing locations below).
I want to talk with you about our accomplishments over the last eleven months and why despite the major challenges currently facing our industry and the economy I continue to be optimistic about the future.
Our capital is plentiful, we have abundant liquidity, and our revenue is strong. Moreover, we have great businesses in the most profitable markets run by the most talented people in the industry.
* We now have $75 billion in new capital and another $10 billion from divestitures.
* We’ve reduced our assets by 13 per cent and our legacy assets by 35 per cent.
* We have $24 billion in loan loss reserves up from $8 billion a year ago.
* We’ve doubled our cash position this year.
* We’ve grown our core deposit base by 19 per cent to nearly $800 billion
* Our structural liquidity is on par or better than that of our industry peers.
* We’ve reduced our risk exposure and our marks have declined significantly.
* Our revenues are strong and stable. So far this year our core run rate is $95 billion. That’s only $2 billion less than last year which was a record breaking year and a very different environment than today’s.
Let’s take firm hold of what we can control about Citi — the money we spend, the time we invest, the way we do business — and use them all to our advantage. By working smarter and more efficiently, we have the opportunity to build operating leverage and position us for sustained growth when the markets recover.
I’ll discuss all this and more on Monday. If you have a question, please submit it in advance. I’ll answer as many as time allows. Until then, thanks for your hard work and for your unshakable commitment to Citi.
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