Citigroup Strong Despite Ratings Downgrades: CEO
A downgrade of Citigroup's nearly pristine credit ratings will not impede its "thriving" business, new acting Chief Executive Win Bischoff wrote in an internal memo to employees sent Saturday.
"Despite recent rating agency actions, Citi's ratings are still amongst the highest in the industry," Bischoff wrote in the e-mailed memo, a text of which was obtained by Reuters.
"In almost every part of our franchise, we are a strong thriving business. Our balance sheet still allows for the financial strength and flexibility necessary to deliver for our clients."
Moody's Investor Service and Fitch Ratings lowered Citigroup's debt ratings last Monday, after the largest U.S. bank said it would write down $8 billion to $11 billion in subprime losses. Citi also reduced its previously reported third-quarter profit because of worsening credit markets.
The memo seeks to soothe employee concerns about the health of Citigroup's businesses and reassure employees the bank would continue to pay competitively and reward performance.
It makes no mention of potential layoffs, and does not address employee fears about the security of their jobs.
Many U.S. banks and brokerages have announced job cuts in their mortgage-related businesses in the wake of the credit market turmoil. There have also been senior management shake-ups, including at Citigroup, where former chief executive Chuck Prince stepped down on Nov. 4.
Citi said last week it was appointing Richard Stuckey, who helped the bank out of a hedge fund collapse 10 years ago, to fix its troubled subprime mortgage portfolio, which may lead to a fourth-quarter loss.
Bischoff, acting CEO as the bank looks for a replacement for Prince, said Citigroup will stick to its strategy and does not intend to put off important decisions until a new CEO is announced.