Citigroup aims to sell $500 billion of its assets
NEW YORK -- The three-year game plan, revealed Friday, includes getting rid of more businesses, mortgages, real estate operations and jobs.
The bank aims to shed $400 billion to $500 billion of its $2.2 trillion in assets and grow revenue 9% over the next few years as it tries to rebound from massive losses tied to deterioration in the credit markets.
The $500 billion in so-called "legacy assets" the bank intends to sell off or allow to mature include yet-to-be-named non-core businesses, as well as assets in Citigroup's securities and consumer banking segments. That includes mortgages and other real estate-related holdings.
Meanwhile, the anticipated rise in revenue will derive largely from cutting costs — which Chief Financial Officer Gary Crittenden said will mean more job reductions. Citi has so far lowered its headcount by 13,200 since last summer.
The investor presentation Friday did not come as a huge surprise. Citigroup has already begun its winding-down process by writing down about $38 billion in soured debt since last summer, and setting plans to reduce its residential mortgage assets by $45 billion over the coming year. It has also sold businesses including CitiCapital, CitiStreet and Diners Club.
These moves arrived on top of huge stock sales to outside investors, including government funds in Singapore and the United Arab Emirates.
Roger Lister, chief credit officer for U.S. financial institutions at the bond rating company DBRS, said Citi should be able to find buyers for its assets, as most are not particularly risky, and instead are simply low revenue generators for the bank.
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