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Pandit: "I have received thousands of emails from you encouraging me to not give up hope and determination. I never have."

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Sent: Friday, February 27, 2009 7:51 AM
Subject: Memo from Vikram
Dear Citi Colleagues,
Earlier this morning, we announced an exchange offer for our preferred stock that I believe will enhance our capital position and bolster public confidence in Citi, and by extension, our financial system. You will find additional details on the offering in the news release here.
As you've heard me say, we and our regulators were focused on Tier 1 as the capital that supports our businesses -- and based on our Tier 1 of 11.9%, we have been very well capitalized. However, there is now a greater focus on tangible common equity (TCE) ratios, and that has translated into a market confidence issue.

The market's loss of confidence in the financial system became a major distraction for all of us and I want to thank you for your perseverance in helping our clients see the facts about our financial strength and in keeping them as committed to us as we are to them.
Like all financial services companies, we will still need to navigate through the tough environment, but our announcement about our TCE today means that we should no longer be distracted by media and market speculation and that we can go back to leading from strength by focusing all of our attention on what really counts -- excellent client service, unique and innovative solutions, and positioning our businesses to realize the full promise of Citi. My highest near-term priority is to return the company to profitability as soon as possible.
We are well on our way to doing that. We have strategic clarity as a result of the management separation of Citicorp and Citi Holdings. We have significantly reduced expenses and headcount and we continue to reduce risk assets. All of these steps will help the world see what we already see about what makes our company so special and unique -- our people, our globality, and our strong client relationships that have been built over the past 200 years.
Our presence in 109 countries and our ability to link the world and help our clients with their needs anywhere in the world is our key strength. We are as committed as ever to our global franchise and believe that this is what distinguishes us from our peers. Our commitment to serving our clients and customers, especially in their time of need, is the nature of our company. For instance, in the U.S., we have played a leadership role in helping to keep families in their homes in a period of record home foreclosures. In fact, I think we should all be proud that we have kept over 440,000 families in their homes. And, we are committed to always being a systemically responsible company.
There has been a lot of talk about nationalization in the media. This is not a nationalization by any definition. The exchange offer and conversion we announced today does not represent additional capital from the government -- it changes only the form of investment. The government's stock ownership in the company will provide TCE as a bridge through this financial crisis and to profitability. We are responsible for our day to day operations and today's announcement does not change our oversight relationships with our regulators. The government now holds a significant common stock investment in us and we intend to provide an exceptional return to them, along with all shareholders. For those who have been concerned about nationalization, today's announcement should put their concerns to rest.
Many of us are shareholders and I want you to know that this was not an easy decision for us because we understand the impact of the dilution we're asking shareholders to bear. But, in the end, our business is about confidence and I wanted to take definitive steps to alleviate capital issues. I promise you that I am committed to rebuilding value. I want to ensure that the turnaround of Citi is a wealth creator for all of you who are shareholders. Within the next 60 days we hope to announce a long-term plan to ensure that all employee shareholders participate in our success.
I have received thousands of emails from you encouraging me to not give up hope and determination. I never have. And because of the dedication I've seen from all of you, I never will.
Since 1812, Citi has confronted many obstacles and successfully surmounted them all and has emerged stronger for the experience. The last few months have been a difficult chapter in our very long history. It's time for us to put this period behind us and be proud to be Citi again. I am.


Zen Gardens That Never Were: Vikram Pandit Doesn't Have To Put Up With This Shit Anymore

As you may have heard, earlier today, Citigroup announced that CEO Vikram Pandit would be resigning from his post at the bank, effective immediately, along with several longtime lieutenants. While the news came as a shock to Wall Street, it was assumed that on the inside, employees had been given some advanced warning and time to get used to the idea of life without Uncle Vik. That he hadn't just left in the middle of the night. That those hugs on the elevator Monday hadn't been their last. That he'd stashed something away for them to remember him by. A good-bye note. A glossy 8X10 photo to keep on their desks. SOMETHING. Apparently though, not so much. The news of Mr. Pandit's departure after five years atop the company came as a shock to Citigroup employees, including senior executives. In the firm's London office, some executives emerged from a meeting and read the news on their computers and Bloomberg terminals, well before the bank's internal memo was released. Soon a dozen employees were crowded in front of television monitors, following the story on financial business shows. Others were seen around a water cooler on the trading floor, discussing the news. Still others retreated to their desks to parse Citigroup's recent earnings release, looking for hints of internal conflict. "There's shock," said a Citigroup executive based in New York. "Even senior people were surprised." And while early reports suggested that Count Vikula had simply decided that Citigroup had come so far since he'd taken the gig five years ago that his work was done, and that while it was time to move onto the next stage of his life, he'd cherish the memories and the people he met at Citi, it now sounds like the split was a bit more acrimonious than that. Pandit abruptly stepped down following a clash with the New York company's board over strategy and operating performance at businesses including its institutional clients group, according to people with knowledge of the bank. At this time, some questions that need answering: * Does today's news change Meredith Whitney's opinion of the Big C, which, as of last April was that the thought of it still sickened her? * Where is the comment from Prince Alwaleed, AKA Citi's largest individual shareholder and Vikram's number one fan? * Is Sheila Bair happy? * Will Citi's food services employees treat new CEO Mike Corbat in the manner he's grown accustomed? The ladies who serve and prepare the food at Currier House all have crushes on senior Mike Corbat. The woman who checks off the names--the one sitting at the desk--smiles and winks at him. Then the greyish, plump one who serves the french onion dip giggles, when Corbat quips something that's not-so-funny. And during lunch, a man who also works in the dining room--he's the aged guy, with a slightly arched back who stands around in his red coat--comes over to Corbat and gives him some present all wrapped up in tinfoil. The guy in the red coat paternally pats him on the shoulder and walks away. "I just give them tickets to some of the games," he explains. You see, Mike Corbat is a 6-ft, 3-m, 230 pound dear. Whatever the case. Corbat--an all-Ivy offensive guard on the Harvard football team--may be a dear to the people who work in the dining hall, but he certainly isn't dear to his opponents. People who are dears on the field don't get contacted by at least a half-dozen teams informing him of the possibilities of his playing in the National Football League. * Could all of this have been different if those cheap fucks has just given him his Zen Garden? Citigroup CEO Vikram Pandit Resigns [WSJ] Mike Corbat: All-Ivy And A Perfect Team Player [Crimson via Counterparties] Earlier: Vikram Pandit: HAPPY.AS.A.CLAM Related: "...certain design elements have been nixed since the initial planning phase, including a Zen garden."

UBS Chairman: Other Banks Will Have To Fire Thousands Of Employees Too, Y'Know

Difference is, UBS is the only one that's faced facts already, 'cause they're consistently ahead of the curve like that. Credit Suisse, Deutsche Bank, all those other guys will get a cold hard dose of reality sooner or later, though, and when they do they'll say, "Damn! UBS was all over this!" A day after UBS AG announced it was cutting up to 10,000 jobs by 2015, UBS chairman Axel Weber is warning that many of the Swiss banking giant’s rivals may have to follow suit...“I suspect that many banks have not yet really understood what the consequences of the new capital rules for business will be when they come into full effect in 2019,” Weber was quoted as saying in Wednesday’s edition of the German daily Handelsblatt. “We, on the other hand, see this new world very clearly,” he said. “Besides that, Swiss rules commit us to even higher own capital demands than the 10 percent capital quota that Basel III orders.” UBS Chief: Other Banks May Need To Downsize Too [AP] Earlier: Layoffs Watch ’12: UBS Tells Employees Not To Bother Themselves With Figuring Out How To Get Into Work (Ever Again)