cti say they are fine and had good quater, page-3

This should add fire to the US futures...!


Pandit Says Citigroup Price Doesn’t Reflect Strength

March 10 (Bloomberg) -- Citigroup Inc. Chief Executive Officer Vikram Pandit said he’s “disappointed” at the bank’s stock price, saying it doesn’t reflect the bank’s capital strength or earnings potential.

The bank has had its best start to a quarter in more than a year, Pandit wrote in an internal memorandum obtained today by Bloomberg. New York-based Citigroup was profitable in both January and February, and had $19 billion in revenue before disclosed writedowns, he added.

Once the world’s biggest bank by market value, Citigroup dropped below $1 in New York trading last week for the first time as investors lost confidence that the shares can recover after more than $37.5 billion in losses and a government rescue. The bank is the smallest company and the worst-performing stock in the 30-member Dow Jones Industrial Average.

“I am, like you, disappointed with our current stock price and the broad-based misperceptions about our company and its financial position,” Pandit wrote. “I don’t believe it reflects the strengths of Citi.”

Citigroup jumped 12 percent to $1.18 in German trading today. The stock climbed 1.9 percent to $1.05 in New York trading yesterday, giving the bank a market value of about $5.8 billion.

“I am most encouraged with the strength of our business so far in 2009, Pandit added. “In fact, we are profitable through the first two months of 2009 and are having our best quarter-to- date performance since the third quarter of 2007.”

Biggest Shareholder

The government’s plan to exchange its preferred stock for common shares will make Citigroup the strongest U.S. bank measured on tangible common equity, Pandit added. The transaction will also make the government Citigroup’s biggest shareholder, with a 36 percent stake.

The bank has also conducted its own stress tests, using assumptions more pessimistic that the Federal Reserve’s, Pandit added. Citigroup is “confident” about its capital strength. The Wall Street Journal reported Pandit’s memo earlier today.

The bank was created by the 1998 combination of Citicorp and Travelers Group Inc., which with a value of $85 billion was the largest merger in history at the time. The transaction helped persuade the U.S. government to repeal a Great Depression-era law, the Glass-Steagall Act, that prohibited banks that took consumer deposits from engaging in investment-banking activities.

To contact the reporter on this story: Edward Evans in London at at [email protected]
Last Updated: March 10, 2009 04:53 EDT