UK
It doesn’t sound particularly promising for anyone at Citigroup who fancies themselves as a fully fledged investment banker or trader. According to Bloomberg, Vikram Pandit told Charlie Rose he has seen the way forward and it is as a “high-end retail bank” serving “clients that need our globality”. Pandit also pointed out that Citigroup has “gotten rid of a lot of businesses” and will “get rid of a lot more over time”. Less clear is how the divestment of the German retail business fits with the new high-end retail strategy.
“Chuck Prince is a very good man, he’s a good gentleman. He’s a good friend of mine, but frankly speaking, the destruction of all that took place lately clearly has to be attributed to the previous management….” (The Deal).
J.P. Morgan may require at least $188bn in additional equity capital, compared with $160bn for Citi. (Financial Week).
Ospel and deputies agree to forfeit pay. (Financial Times).
$1 a year for CEO at AIG. (The Deal).
How quants doomed the markets. (Scientific American).
Banks compete for low-paid government work. (Reuters).
Small-cap exchange hires for international push. (Financial News).
Bollywood instead of banking. (Bloomberg).
Think your net worth has been clobbered? Think again. (Silicon Alley Insider).
Boom time for builders of utilities, schools, nuclear power stations. (Evening Standard).
Need a job? Debt collection is booming. (CNN).
How to change careers and make it work. (The Times).
Google’s cutting staff, too. (The Times).
I think CITIGROUP is overstretched. Although, they are in different industries, it suffers from the same woes as General Motors. Too big, not sharp enough, not focused enough. It has lived years just by assembling various pieces here and there, without a true strategy, lacking true innovation and falling back in terms of customer service and customer satisfaction.
The only way is to reduce the size of this behemoth. But frankly, I don’t think Citigroup can become another HSBC. The problem is not just about fixing the bad things and getting back on track. The problem is deeper. It is a cultural problem. It means evolving from the status of an American big bank to a truly global Institution. You don’t change the culture just by appointing an ethnical Indian as the new Head.
The time of arrogance and despise for the rest of the world is now foregone for American financial Institutions. They must evolve or perish.The nimble, flexible, smart ones will survive but some of them just have to perish as the Dinosaurs did a few million years ago. It is called evolution or as Schumpeter states it “Creative Destruction”.