Vikram Pandit Talks Crisis Control, Taxpayer Profit, and Book Value (C)
July 15, 2010 2:31 PM
Chief Executive Officer of Citigroup (NYSE: C), Vikram Pandit, recently spoke with Elizabeth McDonald over on Fox Business Network; he had some interesting things to say…
When asked if the crisis is over at Citigroup, Mr. Pandit said, “the core earnings power of the company is strong.” And with the one-year swap spread on Citi’s debt tightening quite a bit over the past year, it is hard not to believe him. Given that the U.S. Treasury is also exiting its position in the bank, one can further make the case that the crisis is more than likely over at Citi. Mr. Pandit added that the government “should be out by the end of year.”
In regards to the book value of Citigroup, Mr. Pandit said, that given the “significant new capital” and “reduced amount and riskiness of assets” Citigroup is in a prime position to return to normalized earnings. He also added that “expenses have been slashed” and “costs are getting under control.”
Shedding a light on the inherent inefficiencies at Citigroup when he first took the position, he said, “For example, we had 50 different chief technology officers, but not one technology standard for the whole company. It was like having 50 different types of airplanes for one airline company. We also had 11 different deposit systems in the U.S., but we are only in 10 major cities."
