Big U.S. union urges Citigroup to break itself up
on July 22nd, 2008 at 6:19 amNEW YORK: A 1.4 million-member union in the United States has urged Citigroup to break itself up because the bank had become “too big and unwieldy to properly oversee.”
Gerald McEntee, the president of the union, the American Federation of State, County and Municipal Employees president, sent a letter on Friday to Win Bischoff, the chairman of Citigroup, urging its board to “restore shareholder value that is currently trapped in the sprawling financial supermarket approach.”
McEntee said a place to start could be to break up Citigroup into two entities: one for securities and investment banking and one for retail banking.
“Such a move would clarify Citi’s financial position, would unlock value, and would allow greater focus in each core area, rather than the unwieldy jumble that has jeopardized our company’s financial position and led to the loss of so much shareholder value,” McEntee wrote in the letter.
A Citigroup spokesman said in a statement that since becoming the company’s chief executive in December, Vikram Pandit had “improved risk management, strengthened the balance sheet, shed legacy assets and noncore businesses, trimmed expenses, and attracted new talent.”
“Our strategy is to build on the universal bank model, which positions Citi to capitalize on global growth trends and deliver the full benefit of its unique capabilities to clients all over the world,” the spokesman, Michael Hanretta, said in the statement.
