Click here for a link to complete article:
By Kaja Whitehouse | 13 May 2008
|
"We wish [Citi's] management team all the best in their ambitious endeavors, but we fear [it] is past the point of fixing," quipped the Oppenheimer analyst known for her forecast that the company would slash its dividend. The biting remarks, in the form of a research note to clients, came on the heels of Citi's long-awaited turnaround plan, unveiled by the bank's executive team on Friday.
In a nearly four-hour presentation with investors and analysts, CEO Vikram Pandit said the bank aims to get rid of $400 billion in noncore assets but otherwise rejected calls to boost the stock by spinning off units. Instead, Pandit outlined plans to further integrate the conglomerate by doing away with overlapping technology systems, among other changes.
Whitney gave Pandit's presentation two thumbs down, saying it was "glaringly light on actual mechanics," and "almost identical to one given by former CEO Chuck Prince about a year and a half ago." Prince, who was dethroned for his role in Citi's mortgage-related losses, stepped down days after Whitney issued her infamous prediction about Citi's dividend and placed an "underperform" rating on Citi's already battered stock. Whitney agreed Citi's "antiquated and disparate" technology systems need work, but expressed skepticism about Pandit's plans to pull it off in tough financial times. Similar efforts at JPMorgan Chase and Wells Fargo were "extremely disruptive and expensive," she said.
Whitney also predicted, in an interview with Bloomberg yesterday, that Citi will be forced to sell major businesses by the end of this year or early next year, and specifically pointed to Banamex, a Mexican bank Citi bought in 2001. She also recommended investors sell their shares, which closed up a penny at $23.64 in New York Stock Exchange trading. "The credit outlooks and the loss assumptions for banks across the board are way too low," Whitney said. "The outlook for earnings across the board is going to be much worse than people expect."
M O R E. . .
Normxxx
______________
The contents of any third-party letters/reports above do not necessarily reflect the opinions or viewpoint of normxxx. They are provided for informational/educational purposes only.
The content of any message or post by normxxx anywhere on this site is not to be construed as constituting market or investment advice. Such is intended for educational purposes only. Individuals should always consult with their own advisors for specific investment advice.
No comments:
Post a Comment