New Citi CEO Vikram Pandit (C) needn’t have bothered with that 4-hour global webcast of his new turnaround plan. Citi-killer Meredith Whitney thinks it’s is as bad as the old one. The only way out, Whitney says, is a break-up. NYP:
“We wish [Citi’s] management team all the best in their ambitious endeavours, but we fear [it] is past the point of fixing,” quipped the Oppenheimer analyst known for her forecast that the company would slash its dividend.
The biting remarks, in the form of a research note to clients, came on the heels of Citi’s long-awaited turnaround plan, unveiled by the bank’s executive team on Friday.
In a nearly four-hour presentation with investors and analysts, CEO Vikram Pandit said the bank aims to get rid of $400 billion in noncore assets but otherwise rejected calls to boost the stock by spinning off units.
Instead, Pandit outlined plans to further integrate the conglomerate by doing away with overlapping technology systems, among other changes.
Whitney gave Pandit’s presentation two thumbs down, saying it was“glaringly light on actual mechanics,” and “almost identical to one given by former CEO Chuck Prince about a year and a half ago.”
Whitney also predicted, in an interview with Bloomberg yesterday, that Citi will be forced to sell major businesses by the end of this year or early next year, and specifically pointed to Banamex, a Mexican bank Citi bought in 2001.
Not that Citi is the only bank that Whitney thinks investors should unload:
“The credit outlooks and the loss assumptions for banks across the board are way too low,” Whitney said. “The outlook for earnings across the board is going to be much worse than people expect.”