Magazine article American Banker

Citi Refining Its Global Strategy: CEO

Magazine article American Banker

Citi Refining Its Global Strategy: CEO

Article excerpt

Byline: Kevin Wack

Citigroup (NYSE:C) chief executive officer Michael Corbat is refining the company's global strategy while asking for patience as the company continues to wrestle with its large portfolio of bad assets.

The man who became Citi's CEO in October, following the ouster of Vikram Pandit, said Tuesday that despite recent improvements in U.S. real estate prices, the company is not going to be completing the sale of its pile of bad mortgages anytime soon.

"We still don't believe that the sale of mortgages is possible at prices that we consider acceptable," he said during a presentation at Citi's 2013 U.S. Financial Services Conference.

Tuesday's presentation marked one of Corbat's first public appearances since becoming Citi's leader. In it he laid out specific performance targets that he said investors can hold the company to. But the targets were for 2015, giving Citi some wiggle room in the short term.

Those financial targets include an efficiency ratio for Citicorp, the mid-50% range. Last year, Citicorp's efficiency ratio was 60%. The projections do not include Citi Holdings, the unit Citi set up in the wake of the financial crisis to dispose of hundreds of billions of dollars in unwanted assets.

To become more efficient, Citi will focus on driving its resources to the best opportunities globally, Corbat said. He suggested that the company sees the greatest potential for growth in fast-growing emerging markets including Mexico, India and China.

But 21 other markets are serving as a drag on the company's earnings, according to Corbat. He did not identify those markets, but he said that Citi's operations in those countries need to be optimized and restructured, and he left the door open to an eventual exit them if insufficient progress is made.

Corbat cautioned that there is a risk that Citi will invest its resources too evenly between markets where the company has strong opportunities for growth and those that don't. …

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