Tags: Whitney | Citigroup | shrinking | bank

Meredith Whitney: Nobody Can Fix Citi — The Incredible Shrinking Bank

Thursday, 18 Oct 2012 02:23 PM

Former Citigroup CEO Vikram Pandit recently resigned and whether he stepped down voluntarily or was forced out doesn’t change one thing: Citigroup can’t be restored into a growing financial institution, said star Wall Street analyst Meredith Whitney.

Citigroup released its third-quarter earnings on Monday, and Pandit quit on Tuesday, and though the bank said his departure was voluntary, the timing has raised red flags.

Pandit reportedly clashed with the bank’s board over strategy and operational issues.

Editor's Note: Google Banned This Video But You Can Watch it Here

John Havens, the bank’s chief operating officer, stepped down as well.

But don’t expect new leadership to lead the bank to greener pastures, Whitney said.

“Citigroup is ‘the incredible shrinking bank,’ and the least interest of the big four, in our opinion,” Whitney wrote in a note, according to The Wall Street Journal.

“No CEO will be able to change these facts in the near term. It appears the board feels the same way, as they have appointed an unknown to the outside to the new CEO position, Mike Corbat.”

In 2007, Whitney predicted the subprime mortgage collapse would force Citigroup to cut its dividend and raise capital, making a spot-on call that gave her rock-star status among equity analysts after initially receiving heat for making the prediction.

In January 2008, Citigroup cut its dividend and the stock would eventually lose more than 95 percent of its equity value until government support would prop it back up.

Some analysts are eager to know more about Corbat, a relatively unknown banker who has spent most of his career at Citigroup or banks that would become Citigroup subsidiaries.

“Michael Corbat isn’t well-known to the Street, and his future strategic direction for the company is uncertain,” Jason Goldberg, a banking analyst at Barclays, wrote in a note to clients, according to The Associated Press.

Editor's Note: Google Banned This Video But You Can Watch it Here

© 2017 Newsmax Finance. All rights reserved.

   
1Like our page
2Share
StreetTalk
Former Citigroup CEO Vikram Pandit recently resigned and whether he stepped down voluntarily or was forced out doesn’t change one thing: Citigroup can’t be restored into a growing financial institution, said star Wall Street analyst Meredith Whitney.
Whitney,Citigroup,shrinking,bank
321
2012-23-18
Thursday, 18 Oct 2012 02:23 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved