As expected Citi to break into "good bank," Citicorp and "bad bank," Citi Holdings

[RB TexLa]

NEW YORK (Reuters) – Citigroup Inc (C.N) unveiled a plan to break into two businesses as a way to shed troubled assets, and reported an $8.29 billion fourth-quarter loss, its fifth straight quarterly loss.

The company also said on Friday that it anticipated more departures from its board, which is losing Robert Rubin as a director later this year. Nevertheless, Citigroup shares rose 14.9 percent to $4.40 in premarket trading, in part because of hope about the bank's plans to restructure and separate its good assets from its bad ones.

"It's one of the first steps toward some positive news and the end of this nightmare," said Michael Holland, founder of Holland & Co in New York, which oversees more than $4 billion of assets.

Citigroup posted $28.3 billion of writedowns and credit losses, bringing its total credit losses over 15 months to more than $92 billion.

The bank's fourth-quarter loss equaled $8.29 billion, or $1.72 per share, compared with a year-earlier loss of $9.8 billion, or $1.99 a share.

The results included after-tax gains of $3.9 billion from the sale of the company's German retail banking operations.

Citigroup is splitting into two operating units, one of which will focus on universal banking, the other on brokerage and retail asset management, local consumer finance, and a pool of assets that require special management.

Anticipated for some time, this step is seen as a "good bank/bad bank" plan. The good assets will be in the universal bank known as Citicorp, while the troubled assets will be in the unit known as Citi Holdings.

http://news.yahoo.com/s/nm/20090116/bs_nm/us_citigroup_3

[Warren Stupidity]

1. So basically Citigroup and Bank of America failed yesterday.

Nice. Things sure are going swell.

[RB TexLa]

2. How do you think they "failed"?

[Warren Stupidity]

4. They both are belly up and will be or are using the fed to bail them

out. Citgroups bad bank/good bank split is only possible, as is BoA's bailout, through the intervention of the federal government. In that mythical world of the 'free market' both of these institutions are failed.

Yes of course technically neither of them is in bankruptcy. But have it your way. Just another normal bidness day on wall street. Nothing to see here. Move along.

[marmar]

3. May Shitibank rot in pieces !!!!

:argh:

[crispini]

5. So, my mortgage is with CitiMortgage.

I'm thinking about calling them and telling them they need to give me a break on my rates or I'll refinance. :D

[RB TexLa]

6. HSBC has a 2.9% rate out or is about to put it out