Restructuring Citigroup: The Bank in Trouble


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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

Case Details:

Price:
Case Code : BSTR330 For delivery in electronic format: Rs. 300;
For delivery through courier (within India): Rs. 300 + Rs. 25 for Shipping & Handling Charges

Themes

Business Restructuring / Financial Restructuring / Risk Management
Case Length : 19 Pages
Period : 2000-09
Pub Date : 2009
Teaching Note : Not Available
Organization : Citigroup
Industry : Banking & Financial Services
Countries : US

Abstract:

The case examines the financial problems faced by the US based Citigroup in the fiscal 2008 due to the sub-prime crisis and the restructuring measures taken by its CEO Vikram Pandit to revive the bank and make it profitable. It discusses the reasons for the rapid growth of Citigroup since the early 2000s under its earlier CEO Charles Prince. The case highlights how the lack of effective risk management practices and poor integration of acquired companies at Citigroup led the bank into significant problems.

Issues:


» Examine the reasons that led Citigroup into trouble.

» Analyze the efficacy of the measures taken by the CEO Vikram Pandit to bring Citigroup back into profits.

» Understand the importance of proper integration of different business units within an organization.

» Appreciate the importance of effective risk management practices.

» Understand the evolution of sub-prime crisis and its impact on financial institutions like Citigroup.

Contents:

  Page No.
Introduction 1
Background Note 2
Citi under Charles Prince 4
Citi under Pandit's Leadership 7
The Road Ahead 12
Exhibits 14

Keywords:

Citigroup, Financial Control Systems, Cultural Issues, Travelers Group, Stanford I. Weill, Charles O. Prince, Credit Crisis, Vikram Pandit, Sub-prime mortgage assets, Restructuring, Re-organizing Business Model, Sub-prime exposure, Acquisitions, Collateral Debt Obligations, Turnaround strategy, Structured Investment Vehicles, Matrix Organizational Structure, Liquidity Management, Capital Purchase Program, Break-up Plan, Bank Stress Tests

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