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quote originally posted by Beri Heng Fan:
Pls share your latest updates too.
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Latest News
Citigroup, in a significant management shake-up, Friday named Gary Crittenden to run a unit housing underperforming and toxic assets the bank wants to get rid of, and tapped Edward Kelly to replace him as chief financial officer.
Colin Robertson
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Crittenden was named chairman of Citi Holdings and will work with its interim chief executive, Michael Corbat, to sell or wind down $850 billion of assets. The unit is separate from Citicorp, whose $1.1 trillion of assets include businesses Citigroup [C 2.68 0.08 (+3.08%) ] wants to keep, such as retail and investment banking, transaction services, and Citi Private Bank.
The appointments are "the first good news we've had in a long time from Citigroup," said Michael Holland, a money manager at Holland & Co in New York. "Crittenden has earned the confidence of the financial community, and Kelly is considered a very solid, competent citizen. It is a welcome relief."
Crittenden, 55, joined Citigroup as CFO in March 2007 after holding the same position at American Express [C 2.68 0.08 (+3.08%) ], Monsanto [MON 81.53 -0.45 (-0.55%) ] and Sears Roebuck [SHLD 39.20 -0.89 (-2.22%) ].
Kelly, also 55, was head of global banking, including Citi Private Bank, and joined in February 2008 from private equity firm Carlyle Group. Known as Ned, he was also chief executive of Mercantile Bankshares, a Baltimore lender he sold in 2007 to PNC Financial Services Group [PNC 27.36 -1.31 (-4.57%) ].
Citigroup Chief Executive Vikram Pandit is trying to restore the third-largest U.S. bank to health after $37.5 billion in losses over five quarters.
The bank has taken $45 billion of taxpayer money, and the government is sharing in losses on $300.8 billion of troubled assets, which are housed in Citi Holdings. As part of a Feb. 27 bailout, the government is expected to become Citigroup's largest investor, with a possible 36 percent stake.
Citigroup did not return requests for comment.
Rochdale Securities analyst Richard Bove labeled the job changes a "big mistake." He called Crittenden an effective CFO and said Kelly's experience as an investment banker and lawyer makes him ill-suited for the CFO job, despite a "superb reputation."
But Anton Schutz, a portfolio manager at Mendon Capital Advisors in Rochester, N.Y., called Kelly a "very good choice" as CFO. "Gary can look terrific if he makes assets disappear quickly at good prices, and Ned has an important role in repairing the balance sheet and working with the government, which has become increasingly dangerous for banks," he said.
Citi Splits
Pandit split Citigroup in January, abandoning the financial supermarket model that Sanford "Sandy" Weill used to create and build the bank in the late 1990s and early this decade.
"Citi Holdings is essentially a marketing operation to get rid of problem assets," said Bert Ely, an independent banking consultant in Alexandria, Va. "It falls on Crittenden to get top dollar for the assets they're getting rid of, and that's not easy in this market."
Among the Citi Holdings businesses are the Smith Barney brokerage, which is merging into a joint venture with Morgan Stanley's [MS 21.15 0.11 (+0.52%) ] brokerage; the CitiFinancial and CitiMortgage finance operations; the Primerica insurance unit; and the Nikko Cordial unit in Japan.
Pandit last week said Citigroup overall made money in January and February, surprising analysts.
David Trone, an analyst at Fox-Pitt Kelton, said Crittenden's job change "could be an intermediate step leading to his ultimate exit."
Ely agreed. "It positions him for bigger things, whether at Citigroup or somewhere else," he said. "If he does it well, then the headhunters will be banging on his door."
Citi shares traded above $50 as recently as July 2007..
Life's like a box of chocs, you'll never know what you gonna get. I didnt know, but when you walked into my life, i just knew i'd gotten the sweetest box...
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