A large US union has urged Citigroup Inc to break itself up, saying the bank had become “too big and unwieldy to properly oversee.”American Federation of State, County and Municipal Employees President Gerald McEntee sent a letter to Citi Chairman, Sir Win Bischoff, on Friday, urging the board to “restore shareholder value that is currently trapped in the sprawling financial supermarket approach.”
McEntee said a place to start could be to break up Citigroup into two separate entities - one for securities and investment banking, and one for retail banking.
“Such a move would clarify Citi's financial position, would unlock value, and would allow greater focus in each core area, rather than the unwieldy jumble that has jeopardized our company's financial position and led to the loss of so much shareholder value,” McEntee wrote in the letter.
A Citi spokesman said that since becoming the company's chief executive in December, Vikram Pandit had “improved risk management, strengthened the balance sheet, shed legacy assets and non-core businesses, trimmed expenses, and attracted new talent.”
“Our strategy is to build on the universal bank model, which positions Citi to capitalize on global growth trends and deliver the full benefit of its unique capabilities to clients all over the world,” spokesman Michael Hanretta said in an e-mailed statement. (Reuters)