Citi could sell off several parts
TEXT OF STORY
Bill Radke: Citigroup used to be a “financial supermarket.” You could do your retail banking there, your business banking, investing, get insurance. But the one-stop shop has met the fallout from this financial crisis, and Citigroup has announced it is merging its Smith Barney brokerage into a joint venture with Morgan Stanley. And there’s word Citigroup may be doing a lot more shedding in the coming days. Marketplace’s Jeremy Hobson has the latest from New York.
Jeremy Hobson: Citigroup is expected to report a huge fourth-quarter loss next week, possibly $10 billion. When it does, Citi could announce plans to shrink down to its core. That may mean selling off its consumer finance services, private label credit cards, and an insurance arm.
Peter Hahn of the Cass Business School says the way this is unfolding shows time is not on Citi’s side:
Peter Hahn: For Citi, it’s probably not a choice of waiting or can it do it now. It needs to get on and focus on what it does best. And if it’s going to shed some businesses now, it’s going to try and get the best price it can. But that’s what it has to do.
The urgency for action is coming in part from Citi’s new chief investor: the United States government. Washington has injected $45 billion into Citigroup since October.
Hahn: I think the government has said the money’s going in, what are you doing about it? Don’t just keep doing the same thing.
A slimmed-down Citigroup may look like it did when it was called Citicorp, sending one of the world’s largest banks right back to where it was in 1998.
In New York, I’m Jeremy Hobson for Marketplace.
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