atans1

Citi cont’d

In Banks, Financial competency, GIC on 15/03/2012 at 11:40 am

Citigroup’s CEO Vikram Pandit said the bank still has capacity to return more capital to shareholders and will seek clearance for a “meaningful” payout after the Federal Reserve rejected an initial plan, the wires report. The Fed allowed f\JPMorgan Chase and Wells Fargo to increase their payouts.

Despite this failure to payout more to shareholders, Vikram S. Pandit could see a total of US$53 million in compensation for 2011, from his yearly pay combined with a multi-year retention package, Bloomberg News reports, citing filings and an analyst’s estimate. Could remind TOC and TRE readers or their usual writers of the transport and HDB ministers who “retired” after failing to anticipate the problems that increased FTs would cause in their portfolios and of “50-year flood” Yacoob who got moved to MICA after Orchard Rd was hit by two such floods in two months in 2010.

Related post: http://atans1.wordpress.com/2012/03/14/citi-falls-fed-test-one-of-only-four-that-failed/

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  1. You forgot to mention the “loss” of MM and SM titles/paychecks after the worst election showing by PAP in decades.

  2. When shareholders allow CEOs to choose boards which is responsible for justifyiing (writing) their paychecks – what other outcome can there be?

  3. Actually to be fair, Citi failed a “return capital to shareholder” test, not a real stress test. All they need to do is to squeeze out an additional 0.1% or more to pass 50%, i.e. have a lower dividend increase or buyback less shares in 2012.

    They are actually in very good shape now balance sheet-wise, trading way below tangible book value per share of about USD 49.81 (from 4Q 2011 press release). The only uncertainty is the Dodd-Frank Act and the impact on US bank revenues going forward. Their earnings power is unknown.

    As for the GIC investment, I’m not sure what their entry price is. Certainly hope they didn’t get in at the top! It could turn out to be a good investment compared to some of their other duds.

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