Wounded Citi maps out sell-offs

12 May 2008

Big changes to the way in which Citigroup operates as a business have been unveiled by chief executive Vikram Pandit.

A major restructuring of the bank's various businesses will see around $500 billion of so-called "legacy assets" - almost one quarter of the company - wound down to around $100 billion.

According to Mr Pandit, who intends to implement these changes within three years, this will mean deep cuts in the firm's consumer banking and securities operations - as well as further write-downs in badly-performing sub-prime assets.

Citi has been one of the banks worst hit by the ongoing credit crunch - which, the IMF has predicted, will cost the industry as a whole around $945 billion.

In recent weeks, the bank has already announced the sell-off of its $900 million joint venture with State Street, its commercial lending and leasing business and its ownership of card firm Diners Club.

Mr Pandit expressed the hope that the slimming-down of non-core commitments will leave Citi in better shape for the future.

"It's all about getting fit," he commented.