Citigroup News

by Darren

Board members are nervous as the US government will soon become the largest shareholder of the New York City banking giant Citigroup (NYSE:C). They have a right to be nervous, considering the type of performance the company has been turning in for the last few quarters. In the most recent quarter, C announced a $1.59 billion first-quarter profit. However, that profit came before payments of preferred dividends to the U.S. Treasury. Despite making what appeared to be an operational profit, the company still owes the government a very hefty sum of money.

“I intend to see this through,” Citigroup CEO Vikiram Pandit said at today’s annual shareholder’s meeting. He also said Citigroup would “repay every penny” of the money they borrowed from the government.

Shareholders are expected to vote on 4 four new additions to the board. They are also expected to vote on several other members, causing a major re-shuffling of the board. The board picks are not without controversy as several large shareholder groups are unhappy with the board’s performance.

Despite the profit announcement, Citigroup really isn’t performing that well.

“Citigroup results included several one-time items (widening debt spreads, the sale of Redecard and accounting changes) which muddied the waters in assessing the franchises underlying performance,” wrote Goldman Sachs (NYSE:GS) analysts Richard Ramsden and Brian Foran on April 19.

The analysts went on to say that Citigroup is still having major problems with credit quality and that doesn’t look to change in coming months.