Citigroup chief executive Vikram Pandit is preparing to break-up the banking conglomerate, separating its assets into essentially a separate "good" and "bad" bank in a startling reversal of the bank's decade-old strategy as a universal bank, according to The Telegraph .
Mr Pandit is understood to have decided that it is now necessary to place Citigroup's investment bank and its US consumer finance arm into what will essentially be a "bad bank," with the remainder's focus being the commercial and retail bank which formed the core of the old Citicorp.
Although the bad bank, which will contain around $700bn (£482bn) of assets, will remain within the legal confines of Citigroup, its results will be reported separately and its access to capital will be limited. In addition, once core businesses such as its US insurance arm Primerica will be sold off.
THE GOVERNMENT HAS appointed Mervyn Davies, the chairman of Standard Chartered, as Trade Promotion and Investment Minister to help to turn around the struggling British banking sector, reports The Times.
Mr Davies, who played a key role in the multibillion-pound bank bailout last year, will become a peer and serve as a minister under Lord Mandelson, the Business Secretary.
Mr Davies will step down from Standard Chartered, the bank he joined in 1993.
The appointment emerged as Lord Mandelson announced more help for small businesses.
Under a new package of measures, the Government will offer a pot of £20 billion for banks to lend to small and medium-sized businesses, guaranteeing 50 per cent of all loans made to small companies, with lenders taking on the remaining risk.
ROYAL BANK OF SCOTLAND raised £1.7bn yesterday by offloading its 4.3 per cent stake in Bank of China as it sells non-core operations and investments to reinforce its balance sheet, says The Independent.
The sale took the form of a placing of the shares at a discount of about 7.5 per cent with institutional investors. RBS was set to officially announce the deal overnight or today.
The Edinburgh-based lender is undertaking a strategic review and will remain present in China, where it has 18 branches. But the deal will signal that it is ready to take action to raise cash to weather the economic downturn.
RBS has already written off billions of pounds in the last year and was hit hard by the market chaos that followed the collapse of the US investment bank Lehman Brothers in September.
Contact: John Bakie, Tel: 020 7484 9805, e-mail: [email protected]IFAonline
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