Pandit: Citigroup Will Return to Sustained Profitability

Thursday, 11 Mar 2010 03:40 PM

Citigroup Chief Executive Vikram Pandit told investors Thursday that the bank is on track to return to "sustained profitability," and that losses from some of its worst assets should be manageable if the economy does not deteriorate.

The comments were uncharacteristically optimistic for Pandit.

The bank's improving performance is easing pressure on the CEO, who has been criticized for being slow to recognize the seriousness of the financial crisis.

Citigroup shares were up more than 3 percent on Pandit's comments, bringing their gains since the end of last week to 17 percent.

"Citi today is a fundamentally different company than it was two years ago," Pandit said, distancing himself from the bank's prior missteps.

Citigroup has posted more than $100 billion of writedowns and credit losses since late 2007. The bank's shares have lost 90 percent of their value since late 2006.

Pandit said that Citigroup's main businesses are aiming to generate annual profit equal to between 1.25 percent and 1.50 percent of their assets, up from 1.15 percent last year, excluding some items.

Citigroup is also aiming to boost its overall asset level by about 5 percent a year. These projections apply to the $1.38 trillion of assets that Citigroup houses in its main Citicorp business and its corporate segment.

Meanwhile, the company's Citi Holdings unit, which holds businesses and assets that Citi is looking to shed, has set aside enough money to cover expected losses on its local consumer loans, assuming the economy does not deteriorate, Pandit said in the presentation.

Local consumer loans make up about two thirds of Citi Holdings' assets.

In remarks at an analyst conference, Pandit emphasized that the bank intends to try to take advantage of its global footprint, predicting that in Citicorp, its emerging markets revenue pool would grow over twice as fast as the developed markets one.

Pandit took over as chief executive of Citigroup in late 2007.

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