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Can Pandit handle it (and should you steer clear of Citi if not)?
15 May 2008COMMENTS
it took years to get rid of chuck prince, and i hope it doesn't take a decade to put a proper CEO in place. Pandit is way out his league on this one. Citi will fall like humpty dumpty and pandit will walk away with millions redundancy pay Read all comments »If Meredith Whitney’s right, Citi’s going to the dogs no matter how hard Vikram Pandit tries to bed it down amongst the roses.
Whitney says Pandit faces an “impossible feat” in turning Citi around. The associated costs, according to Whitney, are simply too “seismic” and the revenue streams too feeble.
From the Whitney perspective, Pandit’s decision to divest $400bn of non-core assets and cut 9,000 jobs makes no difference. She predicts the associated restructuring costs will be prohibitively expensive and that profits (and therefore bonuses) will be minimal for the next three to five years.
To make matters worse, questions are being raised about Pandit’s stewardship of the big bank.
Why, for instance, has he placed an ex-head of Morgan Stanley’s equities business in charge of everything from investment banking, fixed income, corporate banking and alternative asset management at Citigroup, despite a manifest lack of broad organisational experience?
If Pandit fails, Citi will not be a pretty sight. Is now the time to take evasive action and send your CV elsewhere? Alternatively, put the pro-Pandit case below.
COMMENTS
Odysseus221, Mon 02 Mar 09
Hmm. This is a daunting task. Revitalize a bank which has a capital structure of no equity and all debt. How does one create equity overnight? How does one create consumer demand? He can't grow consumer demand when demand has been muted by debt can he? If consumer demand isn't coming back anytime soon there won't be much economic growth...the political forces just plain spent America's wealth like frivolous idiots.
It takes 30 years to pay off a mortgage. Political forces that separated themselves from the Christian belief system and substituted "secularism" instead--the end result of which is catastrophe and collapse of economic system. It took 250 years to build the greatest country in the world under WASP leadership and 40 years to spend the wealth on foreign expeditions and HUD.
The fundamental changes have to be made in people's expectations and the demands it places on government.