WSJ: Citigroup Chairman Not Pressing Bank Breakup

In the autumn of 2012, Trillium Asset Management LLC, on behalf of the Benedictine Sisters of Mount St. Scholastica, along with the AFSCME Employees Pension Plan filed a shareholder proposal with Citigroup Inc. (NYSE: C) asking the company’s board of directors to explore a possible separation of one or more of its business units.

On February 20, 2013, the Wall Street Journal published a story regarding Citigroup Chair Michael O’Neil’s current thinking on exploring a breakup of the bank.

Suzanne Kapner writes:

“Even thinking about breaking up is hard to do. Just ask Citigroup Inc.

Michael E. O’Neill was among a small group of directors who after the financial crisis urged the company to weigh the pros and cons of splitting up the third-largest U.S. bank, said people familiar with the deliberations.

Mr. O’Neill, now chairman, has overseen a management shake-up in the past year and is backing a broad cost-cutting plan. But exploring a breakup is no longer among his top priorities…

With Citigroup shares still 90% below their precrisis peak, executives need to identify those businesses that are underperforming “and do something about it,” said Mike Mayo, an analyst with CLSA Crédit Agricole Securities.

Others in the ‘break up the banks’ camp include officials such as Thomas Hoenig, vice chairman of the Federal Deposit Insurance Corp., and Richard Fisher, the president of the Federal Reserve Bank of Dallas. Advocates also include fund managers that bill themselves as pursuing socially responsible investment strategies, such as Trillium Asset Management LLC of Boston.

Trillium is among a coalition of investors that wants Citigroup to allow investors to vote on measures that would compel managers to examine a breakup and report back to shareholders. Labor unions led by the AFL-CIO are supporting a similar measure at J.P. Morgan….”

You can read the entire story here.