Buried a bit in the news that the government had entered into a definitive agreement to share losses on $301 billion of Citigroup’s toxic assets and the announcement that the company lost $8.3 billion last quarter was a description of a plan to break the firm into two pieces.
The new operations will be called Citicorp and Citi Holdings. Citicorp will function as a commercial bank. The holdings operation will have the company’s brokerage and asset management businesses.
Vikram Pandit, Citi’s CEO, would, it appears, be the head of both units. He has done such a poor job managing the large financial services company that it is amazing that the board would allow him to run the two pieces of an operation that he has nearly ruined. Pandit should be left to run the traditional bank and someone with a better set of skills for managing the business of managing money should be hired as head of Citi Holdings.
Douglas A. McIntyre