Citigroup Sale Under Consideration: Bank Looking At All Options

Executives at Citigroup Inc., faced with a plunging stock price, began weighing the possibility of auctioning off pieces of the financial giant or even selling the company outright, according to people familiar with the matter.

The internal discussions are at a preliminary stage and don't signal that Citigroup's board and management are backing down from their insistence that the New York company has ample capital, funding and strategic direction, these people said. But with the stock down another 26% Thursday, its worst one-day percentage decline ever, Citigroup officials have decided they need to reckon with a range of scenarios that were unthinkable only weeks ago.

Citigroup's board of directors is scheduled to have a formal meeting Friday to discuss the options, according to people familiar with the situation. Directors also have been talking by phone about what could be done to reverse the stock's slide.

Read the whole story here.

Comments

[CitiAlum]

(contd from previous comment)

For God"s sake, the man has amly demonstrated his inability to manage the more simpler and easy to understand Retail banking business and now Vikram has entrusted him with both Retail and Wholesale Banking in Asia!!! WAKE UP VIKRAM AND FIRE BANGA FROM THE ASIA JOB " however, KEEP him at Citi as the Chief Marketing & Communications Officer " a job that he is best suited for as he is the ULTIMATE SPIN-DOCTOR!!!

7. TERRI DIAL (the SAVIOUR from WELLS FARGO) " Head of US Consumer and Global Consumer Strategy - The lady from Wells Fargo - she is obviously gifted and has a track record to boot¦.someone that Dick Kovacevich (Chairman of Wells and a CitiAlum) swears by. Good hire, Vikram!!

8. STEVE FREIBERG (The "BEAN-COUNTING TECHNICIAN) " CEO - Global Cards " The man knows credit cards¦.that you must give to him. But wait till you see the record card charge-offs in the coming several quarters and you will wonder if he is the right guy for this role GOING FORWARD!!??!!

[CitiAlum]

6. AJAY BANGA (the "PRETENDER") - CEO Asia Pacific - He is the "MYSTERY MAN"....a milk and choclates salesman with prior (not so successful) experiences at Nestle, followed by a short unsuccessful stint at PEPSI in India trying to launch KFC.....got hired by Citi in India in 1997 as the local marketing head and has had a meteoric rise at Citi (FOR NO FAULT OF HIS).....and a dream career path at Citi that has left many insiders (and outsiders) wondering if at all Citi knew what good talent meant. Don"t get me wrong folks - this gentleman is a bright and savvy operator....who without an ounce of experience in the core lending business of retail banking has managed to lead the largest retail banking businesses at Citi (WHERE IN HELL IS THE HUMAN RESOURCES AND TALENT MANAGEMENT FUNCTION AT CITI!!!)....If there is ONE SMART THING THAT Pandit should DO, IT SHOULD BE TO FIRE BANGA" - He is single handedly responsible for overseeing the Retail Mortgage Mess at Citi (along with Carl Levinson) and for such open demonstration of INCOMPETENCE " he was then promoted to run Consumer International by Chuck Prince¦.and now PANDIT has appointed him the CEO of the only REMAINING, HEALTHY PART OF CITIGROUP " the Asia Pacific region " which I am certain Banga will MESS UP in his typically inimitable style!!

[CitiAlum]

5. GARY CRITTENDED - CFO - One of the best possible external hires by Charlie (Chuck) Prince....a man who seemingly understands the core businesses of Citi and has an internatinal background to boot.....KEEP GOING GARY....WE WHO KNOW, THINK YOU'RE A GOOD GUY TO KEEP. Fous some though on the productivity opportunities at Citi...your process management and process performance measurement discipline stinks!!! Get rid of CARL LEVINSON.....it is a joke to say that he is the GLOBAL HEAD OF PRODUCTIVITY IMPROVEMENT!! HE IS WAY PAST HIS SELL BY DATE!!

[CitiAlum]

4. JOHN HAVENS (the loyal CONSIGLIERI)- Global Head - Institutional Clients Group and Alternative Investments - yet another senior executive made in the mold of Vikram Pandit.... also a trusted side-kick who spent 19 years at Morgan Stanley....an investment banker and a co-founder along with Pandit of the dismally performing Hedge Fund (Old Lane) which Citigroup acquired purportedly in order to bring these talented executives on board!!! Luckily for Citi's shareholders, he is in charge of what he knows and does best....so hopefully we can see him contributing to Citi's success....

WELL DONE, VIKRAM - PLEASE KEEP HIM AT "ICG" AND DONT ASSIGN HIM TO THE RETAIL BUSINESSES WHERE HE MAY DO UNTOLD DAMAGE!!!!

[CitiAlum]

(continued from previous comment)

3. BRIAN LEACH - Chief Risk Officer - a tested Risk Mgt pro - spent his entire career at MS and was an integral part of the LTCM bailout....so eminently qualified to assist in these times with the toxic assets on Citi's balance sheet.....incidentally, he too is a Pandit buddy who typically has no experience or exposure to retail/consumer banking......Now is that a problem in itself....maybe not. But the big problem is that he has now assigned the task of Retail Banking Credit & Risk Management to Suneel Bakhshi who has not spent a day of his entire Citi career in retail banking....Suneel is a great Emerging Markets Debt and Equities guy with a wide swath of experiences across the wholesale bank but without a clue on what retail credit means.....now this gives you a good sense of what the real problem is....ALL OF THESE LEADERS ARE UNABLE TO UNDERSTAND THE CORE COMPETENCIES AND EXPERIENCES NEEDED TO RUN THE BULK OF CITIGROUP AND ARE INDEED ONLY ABLE TO HIRE BOTH FROM WITHIN AND THE OUTSIDE, PROFESSIONALS THAT SPEAK THE SAME LANGUAGE AS THEY DO - AND THAT IS THE DEAL MAKING, INVESTMENT BANKING LINGO!!

[CitiAlum]

(continued from previous comment)

2. DON CALLAHAN (the proverbial SIDE-KICK) - CAO - who has always been a strategy and marketing guy with a series of assignments in Morgan Stanley as a side-kick to Vikram Pandit....and hardly any understanding of retail banking other than the fact that Discover Cards were owned by MS and which Pandit and his buddies actively lobbied to be spun off sicne they thought that it diluted the preppy image of Morgan Stanley!! Tale to the guys at Discover and they will tell you more about these guys and their ability to read/understand a credit card P&L!!

[CitiAlum]

(continued from previous comment)

I do not want to sound critical of the intellect of many of these senior managers and advisors or even their track records in the domain of investment banking, M&A advisory, the capital markets, etc....

But these areas have historically been by far the lowest (and most volatile) revenue contributors to Citi's P&L in comparison to its core earnings from US and International Consumer Banking, US and International Credit Cards, Global Transaction Services, the vanilla Emerging Local Corporate Banking and its US and International Private Banking Businesses.

Reviewing the Leadership Lineup starting with the CEO:

1. VIKRAM PANDIT (aka "Pandit the Bandit") - A professor turned investment banker who has spent a career at Morgan Stanley at their Institutional Clients Group. A man of great intellect but utterly lacking in CHARISMA (a trait desperately needed in a CEO during tough times), not considered good enough by the Morgan Stanley board to lead MS but somehow handpicked by (the now shamed) Robert Rubin under whose active watch the firm has met its Waterloo! Pandit has no experience nor exposure to Consumer Banking or to any of the core revenue streams at Citi....and to make matters worse, has the amazing inability to hire core leaders in his image - all investment bankers - with no clue of managing a sprawling global financial services giant like Citi.

[CitiAlum]

(continued from previous comment)

In retrospect, I wish I wrote this open letter to you in December last year¦.but I gather it is better late than never " assuming that the Fed or the Board decide not to FIRE you and agree to give you another chance.

I wish you much luck and success.

READ ON FOR THE REASONS WHY I SAY WHAT I AM SAYING ¦..

The problem at Citi is that they do not have enough management depth....as an ex-Citibanker, it appals me to think that the core management team comprises of a bunch of investment banking deal-makers who have the least understanding of the core businesses of Citi that have historically differentiated it from Morgan Stanley and Goldman Sachs. This so-called "Worldclass Leadership Team" - per Pandit's townhall presentation, has hardly any breadth or depth of experience that is needed to manage Citigroup in good times - let alone in these troubled and traumatic times.

Citibank insiders, who feel completely demoralized by the continuing paucity of the leadership bench are shocked at the Board and the Advisory Group's total lack of appreciation for such a huge gap in terms of talent and an utter lack of a sense of urgency to fix it.

[CitiAlum]

(Contd from previous comment)

3. VIKRAM, don"t forget to borrow some of the lessons from our previously well-proven "5 POINT PLAN of 1991" " a small global team of leaders with direct accountability for discrete SBU"s¦.for God"s sake abandon this nonsensical model of a combined Corporate/Consumer Regional Structure¦.none of your senior leaders are competent to manage such a diverse portfolio and particularly the guys you have currently in place. Go for the equivalent of the G-15 structure " maybe now make it the G-25, PUT THE RIGHT GUYS IN EACH POSITION and hold them accountable to you directly.

4. And Finally " Citi has over the years developed and nutured several worldclass leaders in the financial services industry, globally. These highly talented professionals left Citi once Sandy Weill bought Citi as they found Sandy"s management style too mercenary and mafia-like. So don"t feel embarassed to reach out to some of the alums (the young ones who have helped the competition demolish Citi in several markets) and bring back some of these guys and gals¦..while I don"t subscribe to the theory of going "BACK TO THE FUTURE" " I firmly believe that several of these alums were taught a trick or two which could be of great help to you as you try and grapple with this sprawling franchise¦

[CitiAlum]

AN OPEN LETTER TO "PANDIT THE BANDIT"

VIKRAM - you have quite deliberately or rather inadvertently tied yourself up in knots!! I would prefer to believe that you have done everything so far with good INTENTIONS " albeit many of your appointments reek of poor judgement!!

VIKRAM, I beg you to please abandon your suicidal people strategy (McKinnon " HELP HIM BY DOING YOUR JOB!!).

1. ABANDON THE IDEA OF HIRING MORE INVESTMENT BANKERS AND SUPPORT STAFF WHO DON"T UNDERSTAND THE BULK OF THE CITI FRANCHISE, (including your buddies Callahan and Kelly as well as new hires like McKinnon (no clue about banking and has clearly been a contributor to the demise of the DELL Model). It is fine to have a kitchen cabinet of trustworthy guys¦.but for heaven"s sake bring in people who can provide you with a comprehensive view on the areas you know little about¦.

2. FIRE THE GUYS WHO HAVE OVERSEEN THE BULK OF THESE PROBLEMS at Citi " BANGA, LEVINSON, FREIBERG. Don"t forget Einstein"s memorable quote "We cannot solve our problems with the same thinking we used when we created them". Fire them and you will be seen as a decisive leader who is unwilling to tolerate poor/incompetent leaders.

[scottowego]

As an American taxpayer I'm dismayed and torn as to what should be done. The thin that really goals me is the indecisiveness in Washington. Hank Paulson keeps changing his strategy. First he told Congress that he neede the seven hundred billion to buy up "toxic" assets (bad mortgages) or the economy would fail. He's changed plans like four times now. All he's managing to do is ruin any faith people have that our government knows what it's doing. The stock markets are reflecting this. He needs to develop one plan and stick to it. Psychology has just as much to do with the direction and health of the markets and the economy as earnings do. We need consistency in policy. Something that is not happening.

[BigHeadTodd]

Why don't you just sell to Dubai or China, you lily-livered thieves!

You've already sold out the country that made you what you are.

All good AMERICANS should remove any assets from Citigroup and re-deposit them in a local community-owned bank or a credit union. They might not be angels either, but at least they represent YOUR community.

[blood1]

What happens to the $25Billion dollar loan that Paulsen gave them...as they were considered credit worthy a month ago? So not only do all the stockholders loose their money, but so do all Americans....can I deduct that on my 2008 Income Tax Return.


Yeah US Treasury...on doing such a fine job on evaluating all those banks that you "forced" to take money! I am guessing Jan 20th can't come soon enough for you - maybe this will be your only visible failure...Happy Holidays!

[tomas0808]

Anyone notice how the banks that aggressively marketed credit cards are the ones in trouble? Citi, Chase, Capitol One, etc. That's why I chose another bank that didn't do that when I needed a card. They charge 9%. Americans need to educate themselves on this. Companies that advertise aggressively do so because they are crummy companies. There is always another company that doesn't advertise with a better product or service.

Until these criminals get prosecuted Americans need to treat corporations, advertisers, credit card companies, banks, and the politicians that side with them as mortal enemies

[thestargazer]

Somali Pirates are in discussions to acquire Citigroup

[thestargazer]

*WILL REQUIRE ALL CITI EMPLOYEES TO WEAR PATCH OVER ONE EYE

[thestargazer]

The citi that never sleeps is now the citi in a never ending nightmare!