NEW YORK -- Sanford I. Weill built Citigroup into one of the world's largest banking companies. Now, Vikram S. Pandit is watching Weill's creation wither in the stock market.
Reflecting a punishing yearlong decline, Citigroup's stock price plummeted yesterday to its lowest level since 1998, when Weill formed the financial conglomerate through the merger of Travelers and Citicorp.
The shares sank 99 cents, or 4.3 percent, to $22.10, as concern spread that new multibillion-dollar losses might force Citigroup to go hat in hand to foreign investors once again. The market tumble left Citigroup shares down 56 percent in the past year, the worst showing among the 30 stocks that make up the Dow Jones industrial average.
For now, executives say they are confident that the company is financially strong. Yesterday evening, Pandit told employees in an internal conference call that Citigroup was "well-capitalized," according to a person close to the company.
The bank has no plans to seek funds from outside investors, another person close to the company said. Since November, Citigroup has raised about $30 billion from investors in Asia and the Middle East, as well as from the public.
But those investments may not be enough to shore up Citigroup, some investors fear. Sameer al-Ansari, the head of Dubai International Capital, a government-controlled investment fund, told Reuters yesterday that Citigroup might need "a lot more money."
Adding to the gloom, two new analyst reports yesterday forecast that Citigroup would remain mired in red ink this quarter. Merrill Lynch & Co. predicted that Citigroup would take $15 billion in write-downs because of bad mortgage investments, leaving it with a net loss of $1.66 a share. Goldman Sachs estimated Citi's loss at $1 a share.
Since becoming chief executive in December, Pandit, 51, has rejiggered Citigroup's sprawling structure but has not made the radical overhaul that many investors called for.
But investors and analysts say Pandit needs to take far bolder steps to turn around the bank, which has been pummeled by the turmoil in the credit markets. Some have urged him to break up the company, saying Citigroup has become too unwieldy to be managed effectively.
The bank employs about 6,000 people in Maryland.
The headquarters for CitiFinancial, the company's consumer lending division, is in Baltimore.
