Citigroup has underperformed compared to its banking counterparts--as its stock overs near $54. Investors, not the least of which is Prince Al-Waleed bin Talal--continue to demand better performance either through a personnel shake-up or company break-up. And therein lies the question: Is Citigroup’s problem one of management or model?
Al-Waleed, the company’s biggest shareholder, recently met with CEO Chuck Prince to impress upon him the importance of cutting expenses at the conglomerate. There’s speculation that if Prince doesn’t rise to the task, he’ll be dumped, and someone new will be brought in to break up the world’s largest bank.
Not everyone is down on Citigroup, though. Jeffrey Harte of Sandler O’Neill was on “Closing Bell” today, and he has a “buy” rating on the company. Looking into 2007 and even 2008, he sees opportunities in capital markets/corporate business and international finance. Both these sectors are big areas for Citigroup.