New CEO Vikram Pandit promptly Tuesday pledged to carry out "an objective and dispassionate" review of all Citigroup's (C) businesses. Translation? Time to break this sucker up.
Pandit commented on the success Citigroup's wealth-management arm, which includes the Smith Barney retail brokerage and the private bank, and its overseas credit-card operations as "growth businesses." He continued saying he will immediately begin reviewing the bank's operations. "They are different businesses, and they need different strategies."
When pressed for an answer concerning a breakup, Panditi said he "would not rule out anything". This is a direct contradiction to recent statements by Robert Rubin, Sandy Weill and former CEO Chuck Prince who said that they believed in "financial supermarket" concept.
Pandit's lack of anything coming close to supporting the concept can only be construed as an admission of change in direction.
Regarding the dividend, he said the board was very clear that the dividend was "where it was" and that they would make any decisions regarding it. What is more interesting is what he did not say. During each interview he gave, when it came to the various business units, he was consistent in his refrain of "all options are on the table".
When it cam to the dividend question, he simply said essentially that the boards has decided this. Not once did he say "we would review it" or that "any option is on the table". When it came to the dividend, its fate was decided already.
Citi shareholders have to at least be encouraged that as we start out it does not seem like it will be business as usual at Citi. Who know what took so long to decide on Pandit, maybe it took Pandit that long to get the Citi board to give him the carte blanch he wants as it pertains to reshaping Citi, time will tell..
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