Chuck Prince, the chief executive of Citigroup, attempted to shore up confidence in his leadership of the giant American bank yesterday, and rejected calls to break up the company.
In what was billed at his most critical presentation to investors since taking the helm of the bank three years ago, Mr Prince said he was as frustrated by the underperforming share price as his shareholders, and he promised a big programme of cost-cutting in 2007.
Citigroup shares rose modestly as investors and analysts ruminated on what they had heard at yesterday's meeting in New York, but it remained unclear whether the new strategy would be enough to forestall calls for a more significant management shake-up.
Earlier this week, Citigroup appointed Mr Prince's long-time friend Bob Druskin, previously head of corporate and investment banking, as the group's chief operating officer.
He was given a brief to find cost cuts across the bank, and to ensure that cost growth will not continue to outstrip revenue growth.
Citigroup invested $2bn to open 1,700 branches for the retail bank and to hire new traders and bankers for the investment banking side of the business.
But growth at the retail bank has been sluggish, while the investment bank has been criticised for its limited presence in high-growth areas such as commodities and proprietary trading.
Citigroup shares have risen 5 per cent this year, compared to about 20 per cent for its peers.
Mr Prince promised a "leaner, thinner" organisa-tion from now on. "We will eliminate layers of activity that clog up the system," he said.
Mr Prince' s emphasis on cost-cutting is a victory for Citigroup's largest shareholder, the Saudi Prince Alwaleed bin Talal, who went public in July with a call for "draconian measures to curb expenses".
It also increases speculation over the future of Sallie Krawcheck, Citigroup's chief financial officer and one of the most powerful women on Wall Street, two months after she said investment would continue to grow faster than revenues next year.
Citigroup said after Mr Druskin's elevation earlier this week that there were no more management changes in the offing, but there have been persistent rumours that Ms Kraw-check is unhappy at Citigroup.
Mr Prince refused to countenance a break up of the company, and said there were considerable cross-selling opportunities and other synergies from owning both a retail branch network and an investment bank.
But by ruling out both disposals and a big US acquisition, his presentation drew criticism from some shareholders.
"It's more of the same," said William Smith, chief executive of SAM Advisors, which owns Citigroup shares.
"In our opinion, it's disturbing that Mr Prince does not understand what's going on.
"He is losing the battle here as far as what shareholders want."
Mr Prince has been chief executive of Citigroup since 2003, and added the chairmanship this April on the retirement of Sandy Weill, who turned the company into America's biggest bank thanks to a string of acquisitions.Reuse content