Citigroup Admits to $100 Million Losses on 15 Days; Can Leadership Spark a Turnaround?

(NewsVisual, powered by IntellectSpace )-- Citigroup Inc (NYSE: C) shocked Wall Street after disclosing that daily losses of more than $100 million had occurred on 15 separate occasions in its investment bank in 2007.

Citigroup kept mum on the details, but the news sheds further insight into the actual extent of the impact of the mortgage crisis and last year’s $20 billion in write-downs.

James D Wolfensohn, Senior Advisor of Citigroup, commented on Sunday about the industry setbacks: “I think that the managements of many of the financial institutions simply didn’t have a clue of what was going on.”

One of the biggest victims of the subprime crisis, Citigroup is clearly in need of a turnaround plan. As Senior Advisor, can Wolfensohn be the one to help new CEO Vikram Pandit strategize a way to bring earnings back up?

Using an IntellectSpace Knowledge Map as a tool for easily analyzing Wolfensohn’s industry experience and corporate connections, NewsVisual predicts that while the next year will continue to be tough for Citigroup, Wolfensohn may prove to be a valuable asset as an advisor during the bank’s troubled times.

Connections and Experience Explain Citi Vote for Pandit and Bischoff

Citigroup made its highly anticipated announcement that it has finally elected a new CEO and Chairman of the Board. Vikram Pandit, the frontrunner in the mass speculation of who would secure the top spot, has been named CEO and Sir Winfried FW Bischoff will be the company’s Chairman. Both were elected to fill the CEO/Chairman positions left by Charles O Prince III, who resigned in November amidst multi-billion dollar write-downs. The decision was quickly met with criticism from analysts and investors who aren’t confident in the leadership qualities of Pandit and Bischoff (see article from The New York Times DealBook).

NewsVisual created IntellectSpace Knowledge Maps of the corporate experience of Pandit and Bischoff in order to look at the evidence behind this claim of lack of leadership and possibly find the answer as to why Citigroup’s board made that final choice.

In this first Knowledge Map, Bischoff’s multiple connections are clearly portrayed, illustrating his extensive experience in corporate leadership. Not only was he Chairman of Citi Europe and Acting CEO of Citi, he held Senior Executive positions with Schroders PLC and J Henry Schroder & Co. He has held Directorships with numerous companies, including Cable and Wireless, IFIL and Siemens Holdings, and is currently a Board Member for corporate entities that include The McGraw-Hill Companies, Land Securities PLC and Eli Lilly and Company. With such a degree of Board and Executive experience across a multitude of industries, it’s not so surprising that Bischoff was chosen as Citi’s Chairman.

Connections Create Competition Between Pandit and Willumstad for Citigroup CEO Position

Analysts and investors are sitting on the edge of their seats as the Citigroup Board of Directors prepares to appoint its new Chief Executive. The vote will come after five weeks of searching in an effort to replace recently ousted Citigroup CEO Charles Prince (see article by David Enrich in The Wall Street Journal). The front runner appears to be Vikram Pandit, head the Citigroup’s investment bank and alternative-investments business (see October 23 NewsVisual article), though analysts aren’t ruling out the possibility that former Citigroup President Robert Willumstad could eventually nab the CEO position.

NewsVisual created an IntellectSpace Knowledge Map of Willumstad’s past and present corporate and organizational affiliations. Given his long history in finance, Willumstad could have the experience to give him the upper hand in securing the vote from Citigroup’s board.

As clearly illustrated in this Knowledge Map, Willumstad has considerable corporate leadership experience as well as membership to organizational entities. He has been the Chairman of American Insurance Group (AIG) since departing Citigroup as President and Chief Operating Officer, and he is also shown to have former leadership ties with MasterCard, Commercial Credit Company and SC Johnson.

Willumstad has also held non-corporate leadership positions with major organizations and educational institutions, including Habitat for Humanity, the Financial Services Roundtable and Adelphi University.

Common Connections May Factor Into Merger Buzz Between Bank of America and Citi

Could two rival financial giants be heading toward a merger? Though Bank of America denies making any official offers, the Wall Street Journal claims that Citigroup received and quickly rejected the suggestion of a merger between the two, which supposedly was introduced by a “prominent investment banker” (see article by Robin Sidel, Karen Richardsen and David Enrich). While a merger could be good at this point in helping Citi strengthen its leadership team, the large size of the banks could make such a deal extremely complicated.

Despite the complexities, NewsVisual created an IntellectSpace Knowledge Map of the common connections between Bank of America and Citigroup to discover what relationships could be significant in motivating a merger. (Note: the information contained and presented in Knowledge Maps is public information from the Securities and Exchange Commission of the United States of America).

Former Ties Offer the Advantage as Rubin Takes on the Challenge as Citigroup’s Chairman

All eyes are on Robert E Rubin as he takes on the role of Chairman of Citigroup in the midst of some depressing multi-billion dollar write offs (see article by Peter Cohan at BloggingStocks). As former Citigroup CEO/Chairman Chuck Prince takes his leave, Rubin is left with the tough job of leading the company out of this latest series of events. We created an IntellectSpace Knowledge Map of Rubin’s past and present executive and non-corporate leadership roles in the hopes that his experience and connections will offer some necessary advantages in dealing with Citigroup’s crisis (Note: the information contained and presented in Knowledge Maps is public information from the Securities and Exchange Commission of the United States of America.

As this Knowledge Map clearly illustrates, Rubin has ties to a number of very diverse entities. As expected considering his current relationship to Citigroup, Rubin shows leadership experience at other corporate giants that include Goldman Sachs (former Co-Senior Partner and Co-Chairman) and Ford Motor Company (former Director). The Knowledge Map also reveals Rubin’s connections to non-corporate entities such as the Council on Foreign Relations and the National Economic Council. Most notable, however, are Rubin’s government experiences and connections, which are also included in the Knowledge Map. Rubin previously served as the United States Secretary of the Treasury and was Assistant to the President for Economic Policy during the Clinton administration.

Who is Vikram Pandit?

    With Citigroup posting extremely low quarterly results, talk has again resurfaced that current CEO Charles Prince will soon be on his way out. As for Prince’s replacement, much recent attention has focused on Citi’s new Head of Institutional Clients Group, Vikram Pandit. But who is Vikram Pandit? This question was recently posed by Gregory Corcoran (see his article from Deal Journal). We decided to create an IntellectSpace Knowledge Map to find out more information about Mr. Pandit (Note: the information contained and presented in Knowledge Maps is public information from the Securities and Exchange Commission of the United States of America).

    Mr. Pandit has spent the majority of his professional career with Morgan Stanley, where he served as Managing Director and Head of the US Equity Syndicate from 1990-1994 and the Worldwide Institutional Equities Division from 1994-2000. He next served as President and Chief Operating Officer of the Institutional Securities and Investment Banking Group at Morgan Stanley from 2000-2005. He left Morgan Stanley in 2005 and later started his own hedge fund, Old Lane, which he then sold to Citigroup for $800 million in 2007. Mr. Pandit also served on the Board of Directors at the Nasdaq Stock Market from 2000-2003. Mr. Pandit received a BS and MS in electrical engineering and also a PhD in finance from Columbia University. He taught finance at Indiana University before starting at Morgan Stanley.

 

Dimon’s Experience Leads to Positive Results for JP Morgan

JP Morgan Chase CEO James Dimon appears to have gotten the last laugh as the company posted its successful third-quarter results, which greatly surpassed that of Citigroup, the company that had previously given Dimon the boot (see article from WSJ DealJournal). Judging from JP Morgan’s positive performance since Dimon became CEO in 2005, it is likely that he holds a wealth of experience and network connections that would have contributed to the company’s latest figures. An IntellectSpace Knowledge Map illustrates Dimon’s numerous past and present roles in leadership.

As shown in this Knowledge Map, Dimon not only has held Executive Positions at such leading financial institutions as Citigroup and JP Morgan Chase but also at numerous other corporate entities and organizations. After getting his start at American Express in 1982, Dimon quickly worked his way up to Executive status. He served as head of Bank One and SB Holdings and was the President of Travelers Group. Dimon’s leadership at numerous non-corporate organizations is extensive, having held roles as a Director of the National Center on Addiction and Substance Abuse, Harvard Business School, The United Negro College Fund and the University of Chicago. He also is on the Board of Trustees at the New York University Medical Center.