Citigroup splits up the bank after posting loss

From The Washington Times:

Citigroup said Friday it is splitting into two businesses as it reported a fourth-quarter net loss of $8.29 billion — its fifth straight quarterly loss.

In Citigroup’s reorganization, one business, Citicorp, will focus on traditional banking around the world, while the other, Citi Holdings, will hold the company’s riskier assets.

CEO Vikram Pandit’s move will allow Citigroup to sell or spin off the Citi Holdings assets to raise cash. It also reveals the company’s growing focus on back-to-basics lending and deposit-gathering, and dismantles the “financial supermarket” created a decade ago.

Shares rose about 4 percent in pre-market trading.

Some investors have been calling for a breakup of Citigroup for years, as the bank struggled to keep up with its Wall Street peers. Those calls grew louder as the mortgage crisis caused the company’s troubles to mount. [Read More]