Citigroup aims to sell $400 billion of assets
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Fri, 09 May 2008 13:04:05 GMT |
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PHILADELPHIA (Reuters) - Citigroup Inc , the largest U.S. bank, said on Friday said it aims to shed $400 billion of assets over the next two to three years, in a drive to become more efficient.Citi, hit hard by the subprime mortgage meltdown and ensuing turmoil, said it has about $500 billion of "legacy assets." It said it expects to reduce this amount to less than $100 billion within two to three years, according to slides posted on the company's website.Citi also said it is targeting annual net revenue growth of 10 percent from core operations. That includes increases of 7 percent from credit card operations, 8 percent from consumer banking, 9 percent from both securities and banking, and from wealth management, and 14 percent from transaction services.The bank's newly installed chief executive, Vikram Pandit, and other executives will give a four-hour presentation to investors and analysts on Friday.Although Citi has said previously it plans to shed assets to boost its capital position, the magnitude of the sales worries analysts and is likely to prompt fresh speculation of a break-up of the Wall Street giant.Pandit has faced demands from investors that he slash costs, shed poorly performing businesses and even split up the bank. Pandit, however, is expected to fend off fresh calls for a break-up when the company offers the presentation.Since late last year, Citi has recorded more than $45 billion of write-downs and credit losses, raised more than $40 billion of new capital including $2 billion of preferred shares this week, and slashed its dividend 41 percent.Some investors view Citi, built over two decades by Sanford "Sandy" Weill, as too big to govern, a charge that Weill's hand-picked successor, Charles Prince, routinely rejected.Pandit and his team are expected to tout Citi's combination of consumer and institutional businesses, and recommend selling operations and assets outside those main areas.They are also expected to outline the bank's focus on cash management, wealth management and cards as key businesses for the future, a source familiar with the situation previously told Reuters.Investors have in recent weeks grown increasingly hopeful that the U.S. financial sector is nearing the end of its difficulties after being slammed over the past year by the U.S. subprime mortgage market meltdown and ensuing turmoil in global financial markets.(Reporting by Jonathan Stempel in New York and Jessica Hall in Philadelphia; Editing by Steve Orlofsky)(For more M&A news and our DealZone blog, go to http://www.reuters.com/investing/news/mergers )
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