Citigroup to separate card unit in banking overhaul
After a record loss, Citigroup will set up an independent credit-card unit and overhaul consumer banking along geographical line.india Updated: Mar 31, 2008 22:27 IST
Citigroup, battling to restore profit after a record loss, will set up an independent credit-card unit and overhaul consumer banking along geographical lines," two people with direct knowledge of the plan said.
"Steven Freiberg, the current co-head of consumer banking, will run the card unit," the people said, asking not to be identified before an announcement that may come as early as on Monday. "The rest of the consumer group, mainly bank branches and non-bank lending, will be led by five regional heads," the people said.
Vikram Pandit, who succeeded Charles O. ``Chuck'' Prince as Citigroup Chief Executive Officer in December, is reshuffling management at the New York-based bank after it lost more than half its market value in five months. The consumer chiefs will all report to Pandit as he bids to halt a profit decline for a unit that contributes 70 percent of revenue and was previously run by just two people, Freiberg and Ajay Banga.
"Terri Dial, who is joining from London-based Lloyds TSB Group Plc, will oversee consumer banking in the U.S., and Banga will be responsible for Asia," the people said. "William Mills will run Western Europe, Shirish Apte takes charge of Central and Eastern Europe and Manuel Medina-Mora will head Mexico and Latin America," they said.
Citigroup had a net loss of almost $10 billion in the fourth quarter because of subprime-mortgage writedowns at its trading business. Pandit is shedding loans and securities to shrink the bank's $2.2 trillion of assets, and has slashed more than 6,000 jobs.
The bank's shares have tumbled 29 percent this year in New York trading to $20.83 as of March 28 amid more than $20 billion of credit losses. The bank is set to report results for the three-month period ending today on April 18.