Citigroup Inc (NYSE:C)’s capital plan failed the Fed’s stress test a few weeks ago. This means the company cannot authorize any dividend increases or authorize further share buybacks this year. It also means Citi’s management is on the hot seat, especially CEO Mike Corbat.

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Citigroup’s Q1 earnings conference call

The once beleaguered, but now resurgent banking titan held a conference call yesterday to discuss their first quarter earnings results. It turned out that Q1 earnings were relatively good, slightly better than consensus analyst estimates, with profits increasing about 4%, but investors and analysts both seemed more interested in hearing about Citigroup Inc (NYSE:C)’s failed stress test.

That said, almost everyone was disappointed as CEO Corbat played his cards very close to his vest on the subject of the stress test. All he would say was that he would keep all conversations with regulators private, but that the bank was not planning to resubmit to try and pass the stress test in 2014.

Citigroup CEO Corbat put his job on the line

During the Q&A for the conference call, CLSA bank analyst Mike Mayo asked Corbat, “who is accountable for the failed stress test and what (are) the consequences?”

Mr. Corbat replied that he is accountable, but that no one would lose their job over the issue. As a follow up question, Mayo asked if the failure of the stress test was a wake-up call to management. Corbat took the bait and assured listeners that, “We’re wide awake.”

According to Mayo, Corbat pretty clearly put his job on the line with his answer to the question. In an interview on CNBC’s FM Halftime Report, Mayo said, “But if Citi fails the Fed’s stress test a year from now, then there’s the question of the CEO’s job.”

Mayo says Citigroup still a Buy

Mayo has maintained his Buy rating on Citigroup Inc (NYSE:C) and a price target of $58 per share.

“I’m a definite buyer of Citigroup here,” he said. “Don’t forget the stock’s down 90 percent from pre-crisis. They are a unique restructuring story in an industry with serious revenue headwinds.”

Mayo also said “Citi has several levers to pull,” mentioning that the bank could sell off or go public with its Banamex division.