Citigroup Isn't Even Good At the Only Thing It's Good At

Things are not good when your new CEO's priority number one is to "stop destroying our shareholders' capital." But The Wall Street Journal isn't above kicking a bank when it's down.
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Things are not good when your new CEO's priority number one is to "stop destroying our shareholders' capital." But The Wall Street Journal isn't above kicking a bank when it's down.

The latest weak point to be splashed on the cover of the C Section is Citi's retail banking operation, which is still in the hands of one of Vikram Pandit's cronies and which has the highest average deposits per branch of top lenders but which may or may not still keep track of customer accounts longhand. Plus, there's this compelling anecdote in the lede:

Adam Greenfield has been a Citibank customer for 15 years, but he has grown frustrated with what he calls its poor service and "tone deaf" efforts to sell him new products.

After Mr. Greenfield's account at the Citigroup unit was compromised late last year, he decided he had enough. Now, Mr. Greenfield, who runs an urban-design practice in Manhattan, is looking for a new bank.

"I never found that they particularly cared about me," he said.

Unsurprisingly for a bank so "tone-deaf," Citi was not interested in commenting on the experience of a single (soon-to-be-former) client.

But read on: There's an antiquated computer system that won't be upgraded until next year; some cutbacks in Massachusetts, Pennsylvania and Texas; and higher costs than at other retail banks. There's also some evidence contrary to the thesis:

The unit earned $231 million in the fourth quarter, a 41% increase from the same period a year earlier but a 32% drop from the third quarter of 2012.

A Citibank spokeswoman said the North American retail bank has shown improvements in other ways.

It finished 2012 with the highest checking balances, the highest annualized checking growth and the lowest attrition in five years. Acquisition of new customers was the highest since 2009.

"We're not where we want to be by any means, but we are making progress," Ms. Stewart said in a recent interview.

No matter, say unnamed sources.

Now, the pressure is mounting on Ms. Stewart to deliver results, according to analysts and company insiders.

And the branches are so much less cozy than the WaMu sites that Chase took over.

Citi Still Lagging in Retail Overhaul [WSJ]

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Meredith Whitney: Citigroup Should Just Give Up

Earlier today, we wondered if, in light of the news that Vikram Pandit had resigned as CEO of Citigroup, analyst Meredith Whitney's opinion of the bank had changed. Choice comments that Whitney has made about the Big C in the past have included: "Citigroup is in such a mess Stephen Hawking couldn’t turn this company around"; "Citi is like an old broken-down Victorian house"; and Citi “has no earnings power, isn’t going to grow, hasn’t been investable in four years." She also once told Maria Bartiromo that the only way she'd change her mind about company would be if she received "a new brain." Still, sometimes analysts change their tune when new blood is brought in and, like former FDIC chair Sheila Bair, perhaps some of her beef with the bank had been a personal dislike of Uncle V. Now that he's gone, is she seeing Citigroup in a new light? Not so much, no. In the wake of CEO Vikram Pandit‘s surprise departure this morning, Whitney, founder and CEO of Meredith Whtney Advisory Group LLC, issued a note cautioning clients to be wary of Citigroup even under new leadership. “Citigroup is ‘the incredible shrinking bank,’ and the least interest of the big four, in our opinion,” Whitney said. “No CEO will be able to change these facts in the near-term. It appears the board feels the same way, as they have appointed an unknown to the outside to the new CEO position, Mike Corbat.” [...] On Tuesday, the stock has wavered between gains and losses on heavy trading volume in reaction to Pandit’s resignation. Shares are up 29% this year through Monday’s close. Despite signs of incremental improvement, Whitney isn’t backing down from her bearish stance. “Any seat in Citigroup’s court should come with a warning label,” Whitney says. Meredith Whitney: No CEO Can Fix Citigroup [WSJ] Earlier: Meredith Whitney Cannot Stress Enough How Little She Thinks Of Citigroup

Citigroup Investors Don't Care About Making Vikram Pandit Smile

[caption id="attachment_73871" align="alignleft" width="234" caption="Y'all can kiss this ear to ear grin good-bye"][/caption] In the spring of 2010, almost exactly two years ago to date, the New York Times reported that some of Vikram Pandit's top lieutenants had noticed "a new bounce in his step" and "a smile on his face," with one executive speculating that the Citi CEO's cheer could be attributed to the fact that he was starting to "see the day when he will earn more than $1 a year" within reach. On January 18, 2011, that day came. After essentially not receiving a salary since 2008, when he pledged to abstain from getting paid until Citi turned a profit, the board of directors approved "an increase in the annual rate of base salary for Vikram from $1 per year to $1,750,000 per year, effective immediately." It felt good. Really good. Know what doesn't? This crap. Citigroup investors rejected the bank’s executive pay plan, a first among the six largest U.S. lenders, amid criticism it lets Chief Executive Officer Vikram Pandit collect millions of dollars in rewards too easily. About 45 percent of the votes favored the plan, which Citigroup had argued would help attract and retain top talent, according to a preliminary tally at the New York-based firm’s annual meeting in Dallas today. While the vote isn’t binding, outgoing Chairman Richard Parsons said changes will be made. Citigroup Shareholders Reject Management’s Compensation Plan [Bloomberg]

Layoffs Watch '12: Citigroup Has Begun The First Phase Of Its Total Body Makeover

Back in October, new Citi CEO Mike Corbat's personal trainer predicted that Vikram Pandit's replacement would waste no time whipping the place into shape, just like he whipped himself into shape in 2010 with the fat-torching Spartacus Workout. Whereas someone else might've let the bank have until the new year to get serious, allowing for one last season of pigs in a blanket and egg nog and late night pizza and entire gingerbread houses, Citi's day's of "I'll start the diet tomorrow" are over. Corbat's  transformation plan starts TODAY.