As you may already know, Citigroup Inc.
reshuffled its management this week. The struggling bank named 25-year Citi veteran Mike Corbat interim chief executive of Citi Holdings, until another dealmaker can come in and sell off bits and pieces of the portion of Citi that holds the bank's riskiest assets.
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Corbat replaced
Sallie Krawcheck last September as CEO of the
wealth management
division. Corbat will still retain
responsibility for wealth management, but his plate is lighter now that Morgan Stanley owns half of Smith Barney, according to
Bloomberg. Still, make no mistake, Corbat will have his work cut out for him.
Citigroup CEO Vikram Pandit created the new division of Citi Holdings, which includes the
brokerage, retail asset management, consumer finance and most of the risky
assets, in order to manage the balance sheet and restructuring of the bank following Citigroup's two bailouts and 2008 net loss of $18.7 billion. Pandit -- who is heading Citicorp Inc., Citi's "good bank," including the core commercial, retail and investment
banking businesses -- will have Corbat in place to manage assets the bank plans to spin off or units it plans to phase out. These assets and units include CitiFinancial Consumer Finance; its Primerica unit, which Citigroup failed to sell earlier
this year to JC
Flowers & Co. LLC and Protective Life Corp.,
supposedly for $7 billion;
and private-label
credit card businesses. The entire division will have about
$600
billion in assets and about
100,000 employees.
Corbat will have to get the restructuring ball rolling at Citi, but the current economic environment is not exactly a great place to be managing a bunch of toxic assets and divesting assets in. Fortunately, Corbat
has a background as managing director and head of the global corporate bank and global commercial bank, as well as head of global merging markets in markets at Citi. Luckily, he'll also be
working with Davis Polk & Wardwell as Citi streamlines its operations.
Managing a "bad bank" is not exactly a dream job, but unfortunately it seems there are plenty of those these days.
- Maria Woehr
