Thursday, July 31, 2014
Inquirer Daily News

The end of Citigroup

Citigroup splits into two companies: the old bank -- Citicorp -- and the mix of subprime (CitiFinancial) and brokerage (Smith Barney) assets that didn't fit in the chronically tough-to-manage conglomerate.

The end of Citigroup

Multinational, money-losing, government-subsidized, unmanageable Citigroup, having divested already of Robert Rubin and other high-paid remnants of founder Sandy Weill's heyday, will split into two companies:

1) Citicorp, a $1.1 trillion "global bank to businesses and consumers", funded by old-fashioned bank deposits. Includes corporate and investment banking, special services for billionaires, credit cards, branches, business loans, and Global Transaction Services, a fast-growing tech unit. The old Citibank, as if Weill's Travelers had never taken it over.

2) Citi Holdings, a mix of money managers and subprime loan businesses that don't fit. Includes a stake in broker Morgan Stanley Smith Barney, plus Primerica, subprime CitiFinancial, CitiMortgage, Nikko (Japan), and consumer finance groups in Europe, Asia and Latin America; plus loser investments backed by U.S. taxpayers.

Citi Holdings is more or less for sale, but in the meantime Citi says it's looking for someone to run it.

Citi release here; Financial Times story here. Details on U.S. bailout of Citi here. Citi lost $8 billion last quarter here. Director Richard Parsons says the board is being "reconstituted" here.

About this blog

PhillyDeals posts raw drafts and updates of Joseph N. DiStefano's columns and stories about Philly-area finance, investment, commercial real estate, tech, hiring and public spending, which he's been writing since 1989, mostly for the Philadelphia Inquirer.

DiStefano studied economics, history and a little engineering at Penn, taught writing at St. Joe's, and has written the book Comcasted, more than a thousand columns, and thousands of articles, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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