Subprime Crisis

After Vikram Pandit, Citigroup is 'going to get a lot smaller'

New York: The incredible shrinking bank may have to shrink more. In the hours after surprise announcement that Citigroup CEO Vikram Pandit was stepping down, speculation was rife, and facts scant, about what lay ahead for the nation's third-largest bank.

Pandit left after a series of embarrassments and missteps that apparently unsettled Citigroup's board, including a "no" vote from shareholders on his pay package and a ruling from the Federal Reserve that the bank was not strong enough to raise its stock dividend.

Under his successor, one possibility given high odds by financial analysts is a strategy of more cost-cutting, more shrinking and more focus on boring, traditional banking, like making loans.

"It's going to get a lot smaller," said Gerard Cassidy, a long-time banking analyst at RBC Capital Markets. "You've got to shrink to make big money."...more    

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