Citigroup Inc. (NYSE:C) held a conference call this afternoon in response to the shocking resignation of the CEO, Vikram Pandit. Citigroup Inc. (NYSE:C)’s President and COO also resigned this morning. Citigroup Inc. (NYSE:C) decided to hold a press conference, after confusion regarding the resignation. Below is the full transcript. The best part is where Mike Mayo hammers Citigroup Inc. (NYSE:C)’s new CEO, Mike Corbett for answers (towards the end).


Unknown Speaker

Thank you we get a break thank you all for joining us this afternoon.

On our call today we have a Mike O’Neill, chairman of the board of Citigroup and our new CEO go Corbett.

We will start with some opening statements from each and then we will be happy to take questions.

Before we get started on like to remind you that today’s conversations may contain forward-looking statements which are based on management’s current expectations and are subject to and changes in circumstances.

Actual results in  actual that was conditions may differ materially from these that is due to the variety of factors including the progression of factors referenced in our discussion today and those included in our Secretary filings including without limitation the risk factors section of our 2011 form 10K.

With that said let me turn it over to Mike O’Neill.

Unknown Speaker

Thank you for joining us. As you all know, this morning we announced the the competitive was stepping down and that the board had elected Mike Corbett as chief executive officer of Citigroup.

Become chose to submit his resignation and the board accepted it. Contrary to speculation, no strategic or regulatory or operating

issue precipitated the resignation.

Nor is there an other shoe to drop.

And certainly there is no issue of conduct or ethics Vikram Pandit is a man of great integrity.

You successfully led us to the recession for 75 years and what we could do to the bank and executed this strategy is done a return to the basics of thank you.

His a compass would have been essential to making city a strong mobile enterprise and one which is well positioned for the future.

The board of that did unanimously Michael Corbett as Vikram’s successor because we believe he has the ideal experience and proven track record as a leader and because we believe he will space place a special emphasis on sharpening the company’s focus on achieving sustained, strong, operating performance.

In fact, Mike for some time has been at the center of the board comprehensive management and at and CEO succession planning process.

Mike has demonstrated his ability to execute over the newly three decades of the firm.

He was the CEO of Citi holdings from its inception.

But he managed to wind up in early $600 billion of non-core assets.

Since the beginning of this year, he was CEO of Amia where you had successfully managed our business in the midst of the difficult operating environment in that region.

In summary, the board remains confident in the strategy of the firm including the thanks of our core printers in Citicorp and the wind down of legacy assets in Citi holdings.

As demonstrated by our excellent third quarter results.

With that, I will turn it over to Mike Corbett.

Let me add to Mike Koman Thomas that we owe a debt of gratitude for both Vikram and John Havens.

The lead our firm through an extremely challenging time in our history and under Vikram’s leadership we recapitalize the balance sheet and build of financial strength that you saw and our quarterly results yesterday.
We adopted a focused strategy of quarter businesses in Citicorp the blue plate our unique historic strengths as a global bank that will provide strong growth and attractive returns over the long term.
And we identified non-core assets in Citi holdings of which we have shared over $650 billion in just over four years.

A record few can criticize.

Is no question that Vikram laid the foundation to support cities of long-term growth, so to be clear, today’s changes to not reflect any desire to alter the strategic direction of 65 which we believe to be the right one.

Have spent a good part of today with members of our senior management and without exception, they are committed to our firm.

In particular, I have been asked specifically about Brian Leetch our chief Rick’s off year and John Gerspach our chief financial officer.

Both are committed to staying.

We will continue to focus on growing Citicorp’s core businesses, particularly those who we have a unique presence in the world’s fastest-growing markets.

We will remain focused on shutting the remaining assets in and minimizing any negative financial impact in Citi holdings.

And that is and will remain a priority of ours in particular of mine as you know I had responsibility for managing holdings until this year.

And critical to the ongoing execution of our strategy across both Citicorp and Citi holdings, we will remain extraordinarily focused on our efficiency ratio and our overall expense levels.

City is an is an extraordinary organization with tremendously talented people, a unique global presence, and a historic franchise that we will continue to honor.

Our strategy is unique and well-positioned for where we see the world going.

I look forward to taking on the challenging challenge of continuing what Vikram started.

With that, Mike and I are happy to answer any questions.

Brennan Hawken, UBS

Hello Mike, congratulations.

You are clearly very successful in the wind down of assets that started when he took over holdings.

And, when you take a look at SAP assets and the LCL assets , the decline rate a quarter over quarter as slowed year in 2012. Do you think there is something that could be done to reverse that?

And after you moved on from running holdings, did the strategy to remove asset change at all?

Unknown speaker:

It did not.

We left a holdings in extremely good hands with Mark Mason and the team.

And as I think you know Mark and I worked together for the entire three-year is what oversaw the business.

I think part of it as as we look at the remaining assets that are in there, we continue to look at the economics behind those assets and we continue to take advantage of the markets when they offer the right opportunities to sell.

And I think some of those assets in the portfolio today, we think in this environment, based on current market prices are better to continue to hold and collect out that when opportunities present themselves themselves.

But as those opportunities present themselves, to be clear, we will take advantage of that.


So you don’t necessarily see any change in direction as far as holdings go and any of that?

No I don’t.

Unknown Speaker


Taking another direction here, when you look at recent IPO and the recent IPO of a bank in Mexico as an example, I have heard several investors that is even a beginning for covered assets it holds.

Are you willing to consider actions to unlock value that may have been off limits by prior management?

Unknown Speaker

I think that I’m coming into the job and what I said I’m going to take a look at a fresh assessment of things.

So I will look at those things and we will see what the numbers say and what that means.

And then we will make decisions from there.

Unknown Speaker


And I guess the last one for me is maybe taking a step back.

At a really high level, and I probably should have started with this one.

What do you expect maybe to do differently in prior management?

And other you have mentioned that you are not going to take any romantic changes in the strategic direction.

But is there going to be a change of focus?

Is it going to become now that the ship feels a little more right it, that there will be a focus on becoming more of an operator?

Versus the rollup that city always had ever petition of?

Unknown Speaker

Well I cannot speak to necessarily what I would do differently.

But I can tell you what it going to do it what I’m going to focus on. So the first thing is this is a very important time of year for the company.

We are in budgets and strategic planning season and we have a budget that I need to work together with the business had to deliver by year end.
We are in the see card process and we have a document to deliver by January 5. So those are going to be things that obviously I am going to spend time focused on. I think from an overall perspective, I think as Mike said, that the focus is really on operating performance in the real refined focus around that.

So I think again, we have got the right footprint.

We’ve got the right resources.

And it is up to us to make sure that we use those properly and that is what I’m going to be folks.

Unknown Speaker


Thank you for the questions and congratulations again Mike.

Unknown Speaker

Thank you very much.

Unknown Speaker

John McDonald, Sanford C. Bernstein

Unknown Speaker

Micah wondering as you have got another company of the last seven or eight months as chairman, what do lessons learned or take away from you learned from regulators are shareholders on two issues.

One is the C-card process entities relationship in terms of regulators and the gold we have with respect to that and also in terms of the shareholders rejection of workers compensation package and as a discussion with shareholders of all, what are your takeaways in your goals on the issue?

Thank you.

Unknown Speaker

Two good questions.

Let me start with the regulatory issue.

I will tell you that it is I think critical for this firm and actually all firms and banking to have a strong relationships with our regulators.

And I think we do. As in all things, I think things can always be improved.

We would focus on that.

It is an important part of being in our industry.

And I have every confidence that Mike will have strong relationships.

We already has some very good and was billed and his oil and holdings.

Needless to say the regulators took a real interest in progress.

I can tell you having been with them in a number of those visits, that he is very well if you’d there.

So from a regulatory perspective, I think that we are in good shape and I could to get better.

As it relates to — I have been clear that until we are finished going through the process, which is complicated and which needs to be comprehensive, we are not going to say very much.

We have made a statement that says we are talking to our investors.

We have spent a lot of time doing that.

I think we know what the issues are.

We are addressing them.

And come — I think you will have a complete understanding of the approach that we are taking.

Unknown Speaker

Okay thank you.

Unknown Speaker

Moshe Orenbuch, Credit Suisse

Unknown Speaker

That budgeting process and I think that one of the trends that had troubles investors during 2011 about Citigroup and maybe in the very early part of 2012, was the element of expenses relative to revenues and obviously the industry has been in a tough time from that standpoint.

Can you share any preliminary thoughts about how to think about costs?

And whether it is a specifically as whether it is the business like the investment bank or just kind of generally, could you give us some thoughts on that?

Unknown Speaker

I apologize, the first part of your question was cut off. So if you could just give me the first lead in?

Unknown Speaker


Basically, given how important to cost control has been and how that was really a big issue for the company in 2011, the company has made a lot of progress.

But as you are now sitting down as part of the budget and strategic planning process, could you just give us some more detailed or granularity in terms of your thoughts about the company’s cost structure and how it should of all of over the next couple of years?

Unknown Speaker

Yes that is something that we are going to need to be focused on and will be addressed as part of the budget process.

Unknown Speaker


But in terms of your not coming in with specific ideas at this stage?

Unknown Speaker

No specific targets.

As always I have got ideas on things.

And having been around for a while we have some ideas but we are going to let the process work that.

Unknown Speaker

Okay great.


Unknown Speaker

Glenn Schorr, Nomura

Unknown Speaker


First one for Mike Corbet.

Just curious, you got to fit in the shoes of EMEA for a little while and as we approach the next C-card in looking back at the last one and

I think we got some questions on the earnings call about this as well.

Have you noticed of overly shrinking disconnect between you and the regulators other discomfort around some of the international portfolios?

Just curious on your thoughts given the two seats that you sat in an area traction with them if this could maybe help bridge the gap as we go  forward?

Unknown Speaker

Well Glenn we really don’t comment on our conversations with regulators.

Unknown Speaker


How about I will ask in a different way.

Do you see any need to change cities growth focus as it has been laid out in the past couple of years?

Unknown Speaker

I think that as I said, we feel quite strongly that the strategy we have is the right one.

Unknown Speaker

I guess the e-mail and conversations I have had for the day on this were the clients were interested in if there is no big change to strategy and n0 big change to operating metrics, I guess what just happened?

It feels very abrupt to all of us. I’m not sure — Mr. O’Neill if you could comment on that process?

On anything that we don’t see.

But I think people are pleased with the quarter and what just happened in select the company has made the progress that you just spoke about.

But we are also good scratching our heads and saying what just happened?

Unknown Speaker

What happened is that Vikram submitted his resignation and that we expected it. I think that what also happens is that the company has been engaged in a two-year process to make sure that if something like this happened that we had a strong process and they’ll who should succeed the CEO.

Mike has been at the center of the process.

And as a consequence, when this occurred, we were very well-positioned to take this action.

So as I said, the board is delighted that Mike has been willing to take this challenge on. I think you will do a very good job.

Unknown Speaker


And last one.

I think Mike Corbet, between your time at the company and your focus at holdings in your recent the spin in the EMEA, I am curious to get your thoughts besides what you just mentioned that the year end of the gate e process and budget planning.

Is there any other special get up to speed time that you need as a CEO getting to know certain parts of the business better?

Or, do you expect it to be fully functional specs so to speak from the get-go?

Unknown Speaker

I think I am fortunate in a couple of respects.

And that I have been here at the firm for going on 29 and half years.

I have also been fortunate that in those years, I have spent time and probably most every major division we have.

I have spent time a product as part of that.

So I think I have got a pretty good understanding of where and how and the way the firm works.

So I think I come to the table with the benefit of that.

But as always, I will be a keen learner and I think that these processes we are going into are going to be a great way to do that through a deep dive in the budget and C-card so I feel good about where we are and where we are at the

Unknown Speaker

Okay thanks to both of you.

Unknown Speaker

Dave McGowan, organ Stanley.

Unknown Speaker

Good afternoon thanks for the question.

Somebody just asked one of my regulatory questions so I guess it’s a follow-up.

An earlier question use the word out about.

Can you bring us up-to-date on your discussions with the rating agencies with respect to today’s development?

Unknown Speaker

You know, believe it or not I have been kind of busy here so have not had a chance to read those.

When I turn it over to the investor relations.

Susan do have a thought on that?

Unknown Speaker

It is affirmed.

So we have heard definitively back from them and we are waiting to hear from S&P but those dialogs are ongoing.

I think they know and are comfortable with Mike Marbach.

So we will see how those processes play out.

Unknown Speaker

Jim Mitchell, Buckingham Research

Unknown Speaker

Good afternoon maybe this is asking a similar question has been asked previously.

But I hear from you guys wanted to sharpen the focus on improving operating metrics and focus on efficiency ratios.

Is there implicit takeaway that we should have that you feel that more can be done on the expense side?

That maybe we can see accelerated expense reductions at the firm over the next year or two?

Is that how we should think about your comment?

Or am I reading too much into it?

Unknown Speaker

Jim the way I think about it is expenses are clearly a piece of it and we have to be focused.

But again it is run allocation around of all of our finite or valuable resources of capital of balance sheet and risk appetite and investment dollars of tech spend.

So we will be focused on all of those.

Unknown Speaker

Okay I guess we will hear more potentially as you get your arms around this early next year?

Unknown Speaker


Unknown Speaker

Okay great.

Thank you.

Unknown Speaker

Betsy Graseck, Morgan Stanley

Unknown Speaker

Good afternoon.

So my question is around of Mike how you are thinking about revealing the businesses and the reporting structures.

And I guess the basic question is what kind of hurdle rate and timeframe do you have to hit those hurdle rate for the various buckets of businesses that you are reviewing over the course of the next couple of months?

Unknown Speaker

Actually I just got into this is.

So I need a bit of time.

Unknown Speaker


The reason I raise the question is having been in Citi holdings obviously it throughout the organization, I guess the overarching question I have is, do you feel it is appropriate for different parts of the business to carry different hurdle rate?

Associated with either location or type of business that they are running?

Or is it more of a one-size-fits-all for the company?

Unknown Speaker

No. I think that my biased coming is that it is not one-size-fits-all that these need to be very specific conversations and metrics built around the places that we operate.

Taking into account factors of risk and infrastructure and all the things that go into the decision process.

Unknown Speaker

Okay thanks.

Unknown Speaker

Mike Mayo, Credit Agricole Securities

Unknown Speaker

Good afternoon.

Just a follow-up on what happened to cause the sudden resignation.

I know a few people have asked this.

But was it overpay?

Did you ask them to submit his resignation?

I understand from our position that just yesterday we were asking Vikram candid questions on the earnings call it was talking about long-term strategy in out today we have a new CEO.

And we’re just wondering what were some of the steps behind the scenes at least whatever you can share with us?

Unknown Speaker

Well let me start with pay.

The answer to that is categorically no. Our statement is clear Mike.

Vikram offered his resignation and the board accepted it. Again, we have been in engaged in a process for a little over two years.

This CEO succession is a critical part of any banks or any companies for that matter governance process.

And I think we built a rather robust one.

So I am proud of what we have done.

And we were very well-prepared.

With this occurred.

So I don’t think there is an issue as it relates to governance.

I think we were there.

And we are delighted to have Mike in the seats.

Unknown Speaker

Wasn’t that kind of set in OpEx without even a transition period?

When that have it comes down for three months and offer his counsel to Michael Corbett?

Unknown Speaker

Well, to some degree of, Mike, this was actually fortuitous.

Mike has explained that there were some free very critical processes here that were about to begin.

The budget for 2013, the updating the three-year plan, and submitting the C-card plan.

A new CEO, given the importance of those roles, I think it’s to be part of that process.

And so, if we are going to hold Mike accountable for performance, you clearly needs to have a role in setting the tag it. So I think the

Vikram said earlier today I am told, the ones that you decide to move on there is no point in hanging around.

And I think that has given Mike a clear runway . And I think he and we will benefit from that.

Unknown Speaker

Mike and Mark questions for you to have a question for Mike Corbett.

Did you look outside for a CEO is part of your processor the past two years?

Again without prejudice on the ability of Michael Corbett.

But they do look outside for potential CEOs?

Unknown Speaker

I get a very fair question and the answer is absolutely.

And other as we build but I thought is a very comprehensive plan.

With that intern on mix and internally asked of candidates.

We the same metrics for both.

We spent a lot of time on the effort.

So the answer is absolutely.

Unknown Speaker

And I appreciate you being on this call.

So can you extrapolate in any way what you did at legacy Bank of America in the late 1990s to how you think about Citigroup today?

In terms of perhaps more aggressive down sizing and I guess this is the first call with investors.

This is part of your own imprint in terms of how you thinking about inking?

Unknown Speaker

Well, let’s say two things.

One, you cannot teach an old dog new tricks.

And secondly, I don’t run the company.

So there’s going to be Mike call.

I have seen him and his a very competent man in his very focused on capital allocation and I expect that we will get good results because of his leadership.

Unknown Speaker

And Michael Corbett, what I think I heard you say and I don’t think I may be intended to say that is that it is kind of business as usual.

Most change in strategic direction, no change in the holding strategy, no change in management to continue to grow core businesses and assets.

Stay on think it to the proxy season in your religious focused on the last three months whether it is C-card or budget.

But under Vikram Pandit , the stock price did declined by 89% and we cannot decline why the stock price for such an under performer.

But wouldn’t say maybe that Citi is ripe for a few more changes?

A different tone at the top of the company?

You clearly have your own personality and style and thought.

Can you give us any sense about a change of the tone at the top of Citigroup and how you might do some things differently?

Unknown Speaker

I think as Mike mentioned, the focus is going to be on operating performance.

So, while I said that we think where we have brought the company in terms of model and direction is right, we’ve got to remember that we operate in over 100 countries.

We’ve got to remember that we run at 1.8+ trillion dollar balance sheet with capital and risk.

And how and where it with whom you use those resources is critical.

So I would not minimize the impact you can have on a place in terms of your ability to be smart about where and with whom and obviously how you use those things.

And that we think is part of the big focus.

Unknown Speaker

Last question.

Five years from now, what would be your best measure of having been successful?

Unknown Speaker

Let me spend a little bit of time in the chair and then we can come back and talk about that.

I am sure the between the budget process and the board, we are going to have some opinions about what those metrics should be.

Unknown Speaker

All right thank you.

Unknown Speaker

We have got time for one more question.

Unknown Speaker

Jeff Harwood, it centered on it.

Unknown Speaker

Good evening.

A couple of questions.

One, Mike O’Neill you have talked a little bit about how the board was prepared in a was a pretty extensive search.

How prepared was the new CEO?

So Michael Corbett, how prepared were you for this?

We will just hitting the ground cold and getting up to speed very quickly?

Unknown Speaker

Again, just if you go back a bit over 29 years.

I have had exposure to many of our businesses.

I have extensive relationships across the firm with management and operators.

In the business.

And so, I feel like I have got a grasp around the firm and the way that it operates, how it operates.

Probably as a benefit and thanks to the firm perhaps better than many people who could commented in the seats.

So I feel like all things considered, I have been well prepared for this.

Unknown Speaker

Did you have any kind of a lead idea to at least think for days or weeks or however long it might have been that you could be sitting in the CEO seat?

Unknown Speaker

If I may, let me answer the question.

Mike certainly did not have any sense of timing here.

But I think as part of that succession process, one goes through some pretty intensive profiling.

And of course he knew he was a candidate.

And so, this does not come as a complete shock.

I think the timing is certainly was a bit unexpected.

But he knows he has been under consideration for some time.

Unknown Speaker


And along those lines, you have been there almost 30 years.

Obviously it is too soon for any details.

But can you talk a little bit about how you have seen city available for that time?

And where you see today and the overarching things you would like to see done differently?

Unknown Speaker

Well I think some of the steps will make foreign have five years ago terms of bringing the company back to its roots in terms of being a bank and international bank were important steps.

I think the streamlining and focus of the business model and shutting things that were non-core I think where the right and smart moves.

And again I think at this point, we feel good about the strategy.

We feel that the strategy is right and we feel like we have got to be focused and execute against it.

Unknown Speaker

Okay thank you.

Unknown Speaker

Thank you all for joining us today.

Unknown Speaker

Ladies and gentlemen this does conclude today’s conference.

Thank you all for joining and you may now disconnect.

Unknown Speaker

[ End of transcript ]