Citigroup may be presenting big assets sale (Reuters) (09-05-2008)

NEW YORK (Reuters) - According to unconfirmed sources, Citigroup Inc. is expected to present plans to sell roughly $400 billion of extraneous assets when it meets with investors and analysts on Friday.

Furthermore, in an attempt to cut costs CEO Vikram Pandit intends to reaffirm his promise to cut annual expenses at the largest U.S. bank by roughly 20 percent.

The sales could amount to nearly 20 percent of Citi's current assets, and according to the Financial Times, which first reported the story on Thursday, would take place over several years.

Despite the fact that Citi has already signaled planning to shed assets to improve its capital position, the magnitude of the potential sales is causing concern among analysts, as it indicates a deeper rift than originally expected

Since late last year, Citi has recorded more than $45 billion of writedowns and credit losses, raised more than $40 billion of new capital including $2 billion of preferred shares this week, and slashed its dividend 41 percent.

Precisely which non-core assets are for sale is unclear, but analysts speculated that consumer finance businesses in the United States, Japan, Mexico, and Germany are possible.

The sources requested anonymity because the plan had not yet been announced.

The bank has announced 13,200 job cuts in 2008, though analysts say tens of thousands of further cuts may be needed. The bank ended March with 369,000 employees.

  Source Reuters