Corbat visions for an Efficient Citi That Retains Shareholder Wealth
Michael Corbat CEO thinks his bank needs to stop eating up “shareholders’ capital”. He was talking with analysts through a conference call.
When asked about what he envisioned his bank as in the coming five years he said he hoped the bank “served a social purpose”. Running a “smart and efficient business” with the optimal allocation of its resources as per the needs of “client segments” would be the top priority of the bank, he added.
Corbat said the bank’s “primary focus” is on boosting the stock price.
Corbat became the CEO of the bank after Vikram Pandit left his position in October 2012. Shares of Citigroup Inc. (NYSE:C) plummeted as much as 92% in the last six years. The U.S. Government intervened by providing a rescue package of $45 billion which helped the bank survive the financial crisis. The loan has been repaid by the bank.
The shares are currently trading at 67% of net book value of the company . This is almost 81% of the theoretical liquidation value of the company. The return on equity of the firm was at 4%; the measure is used to determine the use of shareholder capital. The figure is about 10% well under the bank’s estimated cost of equity.
The Citigroup Inc. (NYSE:C) shares were down by 1.02% to $41.66.