Is Citigroup looking for a new chairman?

 

Some Citigroup board members are dissatisfied with the company's performance and are considering replacing Chairman Sir Win Bischoff. The board named Bischoff chairman in December 2007, after ousting former CEO and Chairman Charles Prince.

The board said that any statements about them asking the chairman to step down, or that they are even looking for a replacement, are false.

"Any report that the board is searching for a new chairman is false." - Citigroup spokeswoman Christina Pretto

Citigroup has suffered significant losses due to sub-performing or non-performing mortgage assets on their balance sheet. The actual number of highly leveraged investments and non-performing loans are still in question, since even more loans will come due in late 2009 and early 2010. Loan modifications are certainly in order and should be done swiftly if Citigroup is to stave off another share price reduction, which could put them in further financial ruin.

Citigroup shares have fallen sharply in recent weeks, and the company has announced sweeping job cuts.

A CEO who has never led a public company and a board that is not very familiar with the financial services industry is creating a stir and some sell-off panic has occurred because of it.

Citigroup is said to be the most troubled of the top four financial banks at this juncture and it would take a large influx of capital or a better leader to get them out of this one.

The best thing they could do at this point is get a CEO who understands loan workouts, risk management and global exposure. This is not for the faint of heart.

The Wall Street Journal reported that Citigroup is in talks to buy Chevy Chase Bank. Citigroup's Pretto declined to comment on the matter. This could be a good move to gain market share for deposits, but would be a bad idea for the company as a whole, considering the trouble they are already in and the obstacles that still lie ahead.

It seems that even the thought if Citigroup trying to make an acquisition is thoughtless and reckless in the eyes of many shareholders. This is the time to be cash flush and increase your reserves, not use up your cash to make an acquisition.

If Citigroup is in that much trouble, shouldn’t they be looking for a new chairman, a new board of directors and a new CEO to boot?

A company that is in this much trouble and has a share price that is the lowest since 1995 should probably make some big changes … and fast.