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May 10, 2008 - 1:54AM
Citigroup plans to trim nearly $500B in assets
Comments | RecommendAssociated Press
NEW YORK - Citigroup’s new chief executive, Vikram Pandit, plans to stick with a global banking model after months of intense review — but only after shrinking the company by about one-fifth first.
The three-year game plan, revealed Friday, includes getting rid of more businesses, mortgages, real estate operations and jobs.
The bank aims to shed between $400 billion and $500 billion of its $2.2 trillion in assets and grow revenue by 9 percent over the next few years as it tries to rebound from massive losses tied to deterioration in the credit markets.
The $500 billion in so-called “legacy assets” the bank intends to sell off or allow to mature include yet-to-be-named noncore businesses, as well as assets in Citigroup’s securities and consumer banking segments. That includes mortgages and other real estate-related holdings.
Meanwhile, the anticipated rise in revenue will derive largely from cutting costs — which chief financial officer Gary Crittenden said will mean more job reductions. Citi has so far lowered its headcount by 13,200 since last summer.
The investor presentation Friday did not come as a huge surprise. Citigroup has already begun its winding-down process by writing down about $38 billion in soured debt since last summer, and setting plans to reduce its residential mortgage assets by $45 billion.
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