Citi to sell $500B worth of ‘legacy’ assets
The cuts, accounting for about 22% of the bank’s total assets, were announced by Citigroup CEO Vikram Pandit.
Citigroup Inc. is planning to shed around $500 billion of non-core business assets over the next few years as a way to enhance its capital base and eliminate riskier securities, the Wall Street giant’s chief executive said in a presentation this morning for investors and analysts.
The cuts, which account for about 22% of the New York-based company’s total assets, is designed to reduce exposure to riskier securities such as subprime collateralized debt obligations, structured-investment vehicles and real estate, CEO Vikram Pandit outlined in his presentation.
For the first quarter, the lion’s share of the legacy assets (63%) were in consumer banking, with 34% in securities and banking, and 3% in the bank’s global-wealth-management division, according to the presentation.
Citigroup has posted two consecutive quarterly losses, including $5.9 billion for the first quarter after taking $13.9 billion in write-downs connected with CDOs (InvestmentNews April 18).
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