Inside Financial Services

Right Man, Right Spot, Right Time

An analyst's criticism of Citigroup's chairman is way off the mark

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In his note on Citigroup yesterday, bank analyst Dick Bove writes that Citi chairman Mike O’Neill is “out of his element,” and that O’Neill’s comment in the Wall Street Journal that he’s against breaking up Citigroup anytime soon “reinforces the belief of those who see Citigroup as a company that is now adrift with no clear mission.”

My pal Dick couldn’t be more wrong. He must not know Mike O’Neill or what he’s achieved over his banking career. I can’t think of anyone better equipped, both by way of experience and temperament, to be Citi’s chairman at this particular point in its history. O’Neill has a proven record of streamlining bloated institutions (both at BankAmerica and Bank of Hawaii), improving profitability, and boosting market value. I am highly confident that he’ll bring about a similar positive change at Citgroup.

Contrary to what Bove says, Citigroup is no longer adrift. O’Neill has taken decisive charge there, most notably with his ouster of Vikram Pandit and the installation of Michael Corbat as CEO. Business divestitures are proceeding that will sharpen the company’s focus and strengthen its balance sheet. Nor is Bove right when he implies that O’Neill is implacably against breaking up Citigroup, ever. If anything, the opposite is true: O’Neill has long had serious concerns about whether a commercial bank and an investment bank can optimally exist within the same organization. Mike might not believe this is the right time to effect a change (I totally agree), but that doesn’t mean it will never happen.

Mike O’Neill has had a significant positive impact on Citigroup since he joined its board, and even more so since he became chairman last April. He and Mike Corbat are just getting started in transforming Citi into a highly profitable, global growth financial institution. I’ve known Dick Bove for 30 years and consider him one of the best bank analysts on Wall Street. I respectfully suggest that he find some time to talk with Mike O’Neill, before he misses the good things that are likely to be happening at Citigroup.

What do you think? Let me know!

2 Responses to “Right Man, Right Spot, Right Time”

  1. FRAUDSTER

    Actually, Bove is wrong a lot. He’s the only analyst I know of that got sued and lost … for writing about Bankatlantic. O’Neill’s meager mark on BankAmerica & BOH are hardly cheer for guiding a behemoth like Citi. He is a proven backstabber and schemer as Pandit will attest.

  2. TJ Schoenlein

    I’ve look at Citi everyway I know how – looking for a reason to sell & run. The more I look, the more I like.
    Having been burn by the big banks in the past am a little gun shy. I will add to my BofA holdings, continue to hold Citi, Santander, Goldman.

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