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Citigroup Did It! Sort Of!

[Mike Corbat wipes sweat off brow.]
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The results of the Fed's stress tests are out and 31 out of 31 banks passed, including Citigroup, a feat no one thought the bank would accomplish, probably including the guy who was brought out of retirement to make it happen. And yet it did! Sort of! Citi still has to wait until next week to find out if it's truly in the clear, but for now Mike Corbat can breathe easy and unpack the pens and potted plants he had preemptively placed in a banker's box, just in case.

The Fed’s annual “stress test” of banks’ financial health found all 31 of the biggest U.S. banks had enough capital to continue lending during a hypothetical economic shock where corporate debt markets deteriorate, unemployment hits 10% and housing and stock prices plunge. The exams are designed to ensure large banks can withstand severe losses during times of market turmoil without a taxpayer bailout. It was the first time since the tests began in 2009 that all banks maintained capital levels above what the Fed views as a minimum allowance...Thursday’s test results don’t take into account banks’ requests to return more capital to shareholders in 2015 and beyond, instead assuming that the banks maintain existing payout levels. Next week’s results will incorporate banks’ plans to pay dividends or purchase shares, moves that will likely lower their capital ratios below Thursday’s results. That could prove problematic for banks whose capital ratios came close to the Fed’s minimum allowance on Thursday, since a payout could further deplete that capital buffer.

Fed Finds 31 Banks Put Through Dodd Frank Stress Tests Adequately Capitalized [WSJ]
Citigroup CEO under pressure over ‘stress test’ results [NYP]


Stress Tests '15: Mike Corbat Gets To Keep His Job, Brian Moynihan Would Love To Catch A Break One Of These Days

Part II of the Fed's stress tests results are out and the good news is that 28 banks passed and Mike Corbat can unpack his things. The less good news is that Brian Moynihan's silent prayer to get lucky just once, just to see what it feels like, was not granted.

Goldman Sachs Loves Citigroup's Plan To Fire Everyone

This Mike Corbat guy is some kind of genius.

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.

Layoffs Watch '12: Citigroup

As promised, new CEO Mike Corbat will be firing a few thousand people as part of the bank's weight reduction program.

Mike Corbat's Got Two Choices For Citigroup Employees

Choice number one: everyone starts earning more money for the bank, following an exhilarating pep rally run by Corbat in the cafeteria involving senior executives shooting Citi swag into the crowd out of tee-shirt guns, cheerleaders, and  a Spartacus Workout demo and before/after shots of MC, meant to inspire people and show them what they're capable of if they really put their minds to something. Choice number two: Bank of America-style layoffs. Michael Corbat, new chief executive officer, says he wants to run a more efficient bank. That means rousing or cutting one of Wall Street’s least productive workforces. Citigroup generated about $206,000 of revenue for each employee through the first nine months of the year, down 7.5 percent from the same period in 2011, while rivals including Wells Fargo & Co. posted increases, according to data compiled by Bloomberg. Excluding a one-time writedown of $4.7 billion, Citigroup’s productivity rose less than 1 percent...“It’s likely they will have some sort of headcount- reduction program more in line with Bank of America, which is looking to get rid of about 10 percent of employees,” said Erik Oja, an equities analyst at Standard & Poor’s in New York. “Having the lowest revenue per employee is something they will have to address, and growing the revenues is pretty tough right now with net interest margins falling and loan growth so low.” Pandit probably was distracted from his cost-cutting goal as he grappled with public rebukes while trying to sell unwanted assets, said David Knutson, a credit analyst with Legal & General Investment Management America in Chicago, which owns Citigroup debt. Disposing of Citi Holdings assets remains “the elephant in the room,” he said. “He had a lot of plates in the air, and there were a couple of setbacks,” Knutson said. “Expense cuts are painful, and you’ve got to gore some sacred cows,” Knutson said. “You can’t do that if you don’t have an explicit mandate, if you don’t have focus and you’re hamstrung with legacy issues.” Citigroup Productivity Worst of Big Banks Shows Challenge [Bloomberg] Earlier: Mike Corbat Will Torch The Fat Off Citi Like He Torched The Fat Off His Abs


Citigroup Super Psyched About Worst Quarter Ever

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