Citigroup, Lehman, Goldman - Not All Is Well

The New York Post has an interesting article about Citigroup. Comparing the company's share price with its main rivals (Citigroup shares up 5% this year, compared to a 20% rise over at Bank of America and JP Morgan Chase), some are apparently suggesting that Citi might need to be broken up to achieve shareholder value.

The newspaper quotes CreditSights analyst David Hendler, who suggests that Citigroup is too bureaucratic and risk averse and that CEO Chuck Prince and his cohorts 'have no risk or feel for the markets'. The answer ? Perhaps spinning off the investment bank. Hendler says that Citigroup 'is too big and management need to realise that they have the skills and disposition to manage a lending and retail operation, not an investment bank. If they did spin-off and IPO, calling it (the investment banking unit) Salomon Brothers, they'd get a huge multiple from the market'.

And, although Goldman Sachs has clearly had a mega year, the firm's is not having it all its own way - at least not in Europe. The Wall Street Journal reports that Goldman may have to settle for fourth place in the European year-end M&A league table - and that would be the firm's worst performance since it came in second to Morgan Stanley in 1998. Goldman has had the top slot every year since. But this year things are different. Morgan Stanley, JPMorgan and Citigroup are currently all out in front of Goldman - with not long to go before year end.

Finally, Lehman Brothers has shuffled the pack in order to get more out of its UK investment banking business. Michael Troy, who joined the firm from Morgan Stanley a little more than a year ago, is to run the unit. He takes over from Anthony Fry, who will apparently focus more on developing the bank's UK client base. According to Thomson Financial, Lehman is currently in 16th place in UK M&A this year - down from 10th in 2005.

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