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Published January 13, 2009 at 4:10 PM
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 It appears that Vikram Pandit is taking back his promise to keep Citigroup Inc. together as a giant financial supermaket. The troubled New York bank's board has reportedly approved a deal to merge its brokerage business with that of Morgan Stanley and announced a major reorganization, according to CNBC. Meanwhile, The Wall Street Journal also says that Citi is preparing to unveil a major restructuring plan.
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The WSJ writes:
In addition to spinning off the New York company's Smith
Barney retail brokerage unit into a joint venture with Morgan Stanley,
Citigroup is preparing to narrow its overall mission to two areas,
sources said. The company plans to focus on wholesale banking for large
corporate clients and retail banking for customers in selected markets
around the world, people with knowledge of the discussions said
Tuesday.
Other businesses likely to be shed include Citigroup's
consumer-finance operation, such as Primerica Financial Services and
CitiFinancial, private-label credit cards and many of Citigroup's
consumer-related businesses in Japan. Citigroup also plans to
substantially trim its proprietary-trading activity, which had been
consuming significant amounts of scarce capital.
The revamp of the financial conglomerate is expected to be announced on
Jan. 22, when Citi reports its fourth-quarter results, which could
tally up to $10 billion in losses. With a federal bailout via the Troubled Asset Relief Plan already propping it, Citi's management has apparently decided to
take drastic action to shore up confidence in the bank, but at the expense of the empire Sandy Weill created a decade ago. - George White
See WSJ story
See CNBC story
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