Citigroup: Let the Breakup Begin
Even before the ink was dry on the deal merging Morgan Stanley (MS) and Citigroup’s brokerage operations, talk surfaced of more radical changes at Citigroup (C).
It’s not known exactly what Citi, which pioneered the concept of the financial supermarket, will look like. But it’s quickly becoming clear it will be a whole lot different from the institution initially conceived back in 1998 when Citicorp and Travelers Group were merged to form Citigroup. With the brokerage sold, Primerica, largely an insurance operation, is on the chopping block, according to a source familiar with the discussions. So are some of the bank’s proprietary trading operations, the same ones that bulked up on the toxic real estate-related securities now making Citi’s balance sheet sick.
Broadly speaking, the bank will still have consumer, commercial, and investment banking operations, according to the source. Citi will also hold on to its private bank, which caters to the mass affluent. (An announcement with explicit details isn’t expected until the bank’s earnings call on Jan. 22.)
