Sandy Weill, the former chairman of Citigroup, yesterday urged Vikram Pandit, the financial group's newly-installed chief executive, not to break up the company.
Mr Weill, who said he was "thrilled" with Mr Pandit's appointment, said combining a commercial bank with an investment bank made even more sense today than it did when Citi was formed in 1998. "If it is managed right, it makes all the sense in the world," he said.
Mr Pandit's predecessor, Chuck Prince, faced growing calls to break up the company from investors frustrated by years of disappointing performance. The shares have tumbled 40 per cent this year as Citi's exposure to mortgage-backed securities has left it with huge losses and a weakened balance sheet.
The scale of the problems facing Mr Pandit was highlighted yesterday as Citi's market value was almost overtaken by JPMorgan Chase, the rival run by Jamie Dimon, Mr Weill's former protege. Citi, which has already lost its title as the most valuable US financial services company to Bank of America, had a market capitalisation of $153 billion in early New York trading against JPMorgan's $151 billion.
Citi's balance sheet will take another knock after its decision on Thursday night to provide financial support to off-balance sheet vehicles with $49 billion of assets.
