Citigroup's new chief executive embraces the do-it-all strategy, rejecting calls for a breakupCitigroup CEO Vikram Pandit has made up his mind: The world's largest bank will remain intact. After months of speculation, the new chief has rejected calls for a breakup. "You couldn't design a better footprint or get a better set of assets if you had to build a bank from scratch," Pandit told BusinessWeek. "This is clearly the right model."
Pandit's ringing endorsement of an all-in-one financial-services company may test the patience of weary investors, who worry that Citi (C) is too big to manage or grow. Citi's first-quarter profits, which will be announced on Apr. 18, won't quell those concerns: The bank faces billions of dollars in additional writedowns from the mortgage mess. "Let's be clear, the earnings report is going to be ugly," says William T. Fitzpatrick, an equity analyst at Optique Capital Management. "The numbers are anybody's guess."
When Pandit took the helm on Dec. 11, he vowed to make "an objective and dispassionate review" of the company. Now after spending the first 130 days of his tenure "pressure-Âtesting" more than 50 different units, Pandit remains committed to four global groups—cash management services, investment banking, wealth management, and credit cards. Some contingents had reasoned that Citi would be better off without investment banking or U.S. credit cards. Pandit argues those businesses are critical to the bank's strategy of selling financial products all along the banking food chain from companies to consumers. "It's no longer the model in question now. It's the execution," says the 51-year-old Pandit. "Everybody before me has wrestled with that."
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