Reducing the headcount is only treating the symptoms and not the cause of Citi’s problems. Mr. Corbat needs to have a radical think about the “Bank We Want to Be” and sell off or unwind businesses that really do not fit into today’s modern banking blueprint. His role as head of Citi Holdings, the bad bank of Citi, should put Corbat in a good position to make these tough calls. With Volcker, Basel III and other fun stuff on the way, now is the time to lead the market. Keep retail, keep mortgage, keep corporate. Keep the international network – the jewel in the crown that it has always been to Citi. But ditch the investment bank as this is the most risky, most volatile part of the bank (and they never were any good here anyway). It is also where most of the real problems have come from.
The new CEO has the chance to set new banking ground rules in line with the new regulatory direction. Above all, he needs to create a bank that is not “too big to control”.
Read the original article here at eFinancialCareers.
Keith W. Waitt
President & CEO
Consultancy Matters LLC
