In any short history of the financial crisis, it’s basically compulsory to describe banks’ indulgence in risky assets as a “binge.” This wasn’t any ordinary partaking of intoxicants, we're to understand, but an orgiastic debauch taken to destructive extremes, like an out-of-control bachelor party or weeknight with Sage Kelly. And if there was one major bank that downed the most shots, did the most lines, and suffered the longest, most vomit-flecked and brain-shattering hangover, it was Citigroup.
Now that’s all finally past. On Tuesday Citi pulled back the curtains and stepped out into the sunshine, fully clothed, neatly trimmed and to all appearances unsoiled. It was investor day over at 388 Greenwich, the first since 2008, and Michael Corbat wanted everyone there to know he’s feeling fine, just fine:
"It has been a while since we have hosted an investor day. Some people have asked why now? We chose this time because we, the management and our board, believe Citi has crossed an inflection point."
...Reinforcing the optimistic message, Corbat said: "Our restructuring is over. Citi Holdings is behind us. We have shifted to sustainable, targeted and self-funded investments to drive increased market share and revenue growth."
OK, so Corbat isn't exactly the type to get fired up, but the message got across. In another first since the crisis, Citi’s market price finally inched past its book value, making it the last of the major banks to do so. But even with all the divisions shaved off, toxic assets quarantined, and jobs euthanized, Citi still has some catching up to do. From CFO John Gerspach’s presentation:
Citi might have done some toning and firming since 2008, but it’s still a sprawling global behemoth with a finger in every nook and cranny of the financial world. And it would be a bit credulous to believe that Citi's kept its nose absolutely clean in the post-crisis era. But even if Citi isn’t looking to do anymore significant downsizing, neither is it going to be flinging itself into any new markets anytime soon:
[Corbat] added that the bank is not going to take "outsized risks" or get into new businesses that are not core to its strategy, adding: "We don’t need to. We like the hand we’re playing in today’s environment.”
So kudos to Citi for finally purging itself of its crisis demons – at least those that aren’t being decided in court.