Wednesday, December 1, 2010

Citigroup: 2011 (C)

From BreakingViews:

Associated Press
Robert K. Steel has been a 
Treasury official and the 
chief executive of Wachovia.

From: Bob Steel
To: All Citi staff
Date: Feb. 1, 2011
Dear Citi Employee,

By now, most of you probably know that Citi announced the appointment of Timothy F. Geithner as Global Head of Strategy and Investor Relations. Tim, who joins after a hiatus from a distinguished career in public service, will report directly to me.

In his new role, Tim will oversee Citi’s relations with shareholders, including the United States government and key investors in the Gulf Region. He will work closely with me, as well as Vice Chairman Christopher Dodd and Executive Vice President of Government Relations Harry Reid to manage the increasingly challenging regulatory environment presented by the continuing implementation of the Volcker Act.

As you are all aware, we are now focused on developing our client franchise in our core business as we proceed with the series of changes announced in recent months to the corporate organization of the group. Under Tim’s leadership, we will reinforce the confidence we have begun to rebuild with shareholders, creditors and customers as we embark on the biggest restructuring of Citi’s capital structure since its founding.
Tim is an exceptional communicator and strategic thinker. His track record shows consistent results under extremely challenging financial conditions. Our new model — a smaller, focused global bank for businesses with no consumer operations and a niche trading arm devoted to facilitating client transactions — is one Tim understands from his years in public service, both at the Federal Reserve Bank of New York and as secretary of the Treasury from 2009 until 2010.

Until suitable replacements are named, I have asked Tim to oversee all of our investor relations responsibilities, including those for Citi’s pending spinoffs, starting with the planned divestiture of Banamex and our North America Consumer Banking franchise to a consortium led by Banco Itaú of Brazil and Carlos Slim Helú.
Tim will also be intimately involved in the creation of Toxia, America’s biggest nonbank financial institution, through the recently announced merger of Citi Holdings and General Electric Capital’s GE Money division, to be led by John Thain after the approval of the Reverse Morris trust structure and spinoff to both companies’ shareholders.

Tim will also play an active role in advising the board’s Living Will Committee to create a series of contingencies in the event of a significant crisis of confidence like the one in late 2008. Tim’s work with this committee, overseen by Ben Bernanke, our lead independent director, is designed to put Citi in compliance with the Volcker Act’s Too Big to Fail statutes.

As you know, the board took other big actions, including the sale last month of Citi’s remaining stake in Smith Barney to Morgan Stanley and the merger of Alternative Investments with the recently privatized Proprietary Investment Corporation (formerly known as Goldman Sachs Asset Management). As a result of these and other moves, Citi’s new executive team is well on the way to creating the world’s most focused provider of wholesale financial services.

I hope you are all as excited as I am about Tim’s arrival and the great future that lies ahead for the corporation. I am looking eagerly to taking your questions in the meetings that David Axelrod, the new head of corporate communications, will be setting up at Citi locations around the globe in coming weeks.