Wednesday, January 14, 2009

Visions of Citi Division and a Curious Interview

NEW YORK, New York -- Citigroup, recently not only the world's largest bank but the world's largest company according to Forbes, is on the verge of splitting in two, according to media reports.

Lacking kryptonite and holding plenty of depressed real estate securities and CDOs, Citi has been hit hard by the financial maelstrom. A division of the company -- reportedly into "core" and "noncore" assets (likely splitting many of the struggling securities assets from the successful, less-exciting international commercial bank) -- would undo the years of deal-making by former Citi CEO Sandy Weill that famously created a banking behemoth.

Amid that backdrop, I am reminded of an interview of current Citi CEO Vikram Pandit that I saw in November on Charlie Rose.

Charlie has a reputation for being a "serious" interviewer, and I think this is generally fairly well deserved. But to imply that he generally tries to trip up his interviewees or push them too hard would be a bit much.

So when Pandit appeared generally at a loss when asked basic questions about the economy and financial markets on Charlie Rose, I was a bit alarmed. (If you can't access it above, the interview can also be seen here.)

I haven't seen Pandit speaking anywhere else. It's eminently possible he's an extremely smart, cognizant and capable man, banker and manager. And it's very possible that he's nervous when giving television interviews, or that his mind was preoccupied with other matters on November 25, 2008. But in his interview that day with Charlie Rose, I sensed an unconfident man with uncomfortable tics, someone with a surprising apparent lack of knowledge about his own bank's operations, and an interviewee generally dominated by Charlie Rose (compare it to David Miliband's interview in May, when it was he who made Charlie look stupid). Pandit seems to dodge many questions and defers like a novice cheerleader to commonplaces like "Citi is a unique place. We want to bring that uniqueness to the 109 countries we're in around the world." After watching that interview, you had to think, "I'd be surprised if he was still in this position in a year."

It's now a commonly held notion that Pandit's predecessor, Chuck Prince, was a dolt with little real knowledge or understanding of the massive bank he was running. But in his day, Prince certainly won the respect of many, just as Pandit enjoys today. (To be fair, recent days and poor share performance have seen a cavalcade of doubt in Pandit, but he had previously been quite highly regarded publicly.) After seeing his Charlie Rose appearance, I wasn't too sure I'd place any faith in him. But then again, Citi seems to be facing imminent division. Maybe with a banking "supermarket" the size of Citi, nobody really knows what's going on.

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