Vikram Pandit Speaks About Citi (C) And Its Bailout

Citi's (NYSE: C) CEO, Vikram Pandit, gave his first television interview to Charlie Rose after spending a marathon weekend working on a bailout package for Citi with the Federal Reserve. Since the bailout package was announced Citi is up over 100% and more than 16% in today's trading.

Pandit said many interesting things that ultimately the Government needs to fix the housing market before we can get back to market normalcy. Vikram blamed the prior management for getting too deeply into real estate. Pandit said, "What went wrong is we had tremendous concentration in the sense we put a lot of our money to work against U.S. real estate. We got here by lending money, and putting money to work in the U.S. real estate market, in a size that was probably larger than what we ought to have done on a diversification basis."
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Pandit said Citigroup will emerge from the crisis as a "high-end retail bank" serving "clients that need our globality. We’ve gotten rid of a lot of businesses, we’re going to get rid of a lot more over time."

Additionally, Pandit said, "We raised capital from the government and we actually bought insurance from the government. When your risks are that large you can’t go to Aetna, you have to go to the government."

Pandit did say there was not a run on the bank from its wealthy clients. He says the drop in Citi's stock, was really a drop in confidence in the entire financial system. Pandit said, "Citi's strength is viewed to be American's strength in many ways in many of these countries (Citi is in over 100 countries)."

Pandit argued that fear trumped reality and something needed to be done to change the confidence.

Charlie Rose asked his guest about lessons learned, to which Vikram said:
"We didn’t like everything we came into this market with, whether it’s the loans that we had made or some of the businesses we were in. And we moved really fast. What this market tells you is one should have moved even faster. And I keep thinking about it, is there something else I could have done sooner than what I did. And I always wanted to do things that you can think about that one could have done sooner."

Pandit said Citi will continue to sell bad business and get back to its core business of being a bank, taking deposits, putting deposits to work and lending out money.

You can see the entire video interview here.

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