The global meltdown woes continue to haunt Citigroup, as the huge erosion in market capitalisation is beginning to look unmanageable.
Citigroup?s board was supposed to meet late on Friday to discuss the bank?s options after chief executive officer Vikram Pandit?s efforts to rebuild investor confidence failed to halt the stock?s descent to a 15-year low, a person with knowledge of the matter said. The board, led by chairman Win Bischoff and independent director Richard Parsons, will meet at Citigroup?s headquarters in New York, said the person, who declined to be identified because the deliberations are private.
Meanwhile, Citigroup CEO Vikram Pandit sought to reassure employees on a worldwide conference call on Friday, before the company?s board meeting. Pandit and chief financial officer Gary Crittenden held the call on Friday morning New York time, said two people who listened to it and declined to be identified because it wasn?t open to the public.
Pandit said in the meeting that he didn?t plan to sell the Smith Barney brokerage unit or disassemble the company, the duo who listened to the conference call said. There is some amount of tension for the company?s Indian operations, as also the news that Sanjay Nayyar, CEO, Citi India has left for private equity firm, KKR.
Citigroup, once the biggest US banks, with a stock market value of $274 billion at the end of 2006, dropped to about $26 billion on Thursday, slipping to No 5 after the Minneapolis-based US Bancorp.
A plan Pandit announced this week to cut costs by shedding 52,000 jobs and an endorsement by billionaire Saudi investor Prince Alwaleed bin Talal didn?t assuage shareholders? concern that bad loans and securities writedowns may extend a yearlong run of net losses totaling $20 billion.
Meanwhile, Citi, in its Indian operations has seen a lot of exits from senior positions, including that of Sanjay Nayyar, CEO, Citi India.
On Tuesday, Citigroup had assured that global massive layouts would have limited impact in the Indian space. ?The headcount reductions announced globally will have limited impact in India,? the bank said in a statement.
Total employee strength of the Citibank?s Indian operations is 23,000. Citigroup Global Services Ltd, which was formerly known as E-Serve, has 12,000 staff. The back office entity, incidentally, was sold to Tata Consultancy Services.
?The sale proceeds and the transaction should be completed by the end of this quarter,? said a spokesperson of Citibank.