Citigroup Plans to Shed About $400 Billion of Assets

May 9 (Bloomberg) -- Citigroup Inc. Chief Executive Officer Vikram Pandit said he plans to shed about $400 billion of assets over the next three years as part of his plan to return the biggest U.S. bank to profitability.

``There will be more'' divestitures, Pandit, 51, told shareholders at a meeting today at the bank's New York headquarters. The company, which lost $5.1 billion in the first quarter, has recorded more than $40 billion of credit losses and writedowns since the subprime mortgage market collapsed last year.

``They need to pare back the parts that are broken,'' said Barry James, who manages more than $2 billion as president of James Investment Research in Xenia, Ohio, including Citigroup bonds. ``He's a cautious guy. He's not going to do anything rash.''

Pandit, who succeeded Charles O. ``Chuck'' Prince in December, has already announced plans that would reduce the bank's $2.2 trillion of assets by at least $65 billion, according to Susan Roth Katzke at Credit Suisse Group. Last week, he agreed to sell employee-benefit joint venture CitiStreet LLC. In April, the bank opted to sell the Diners Club International credit-card payment network and CitiCapital, a provider of leases and financing for industries including health care and construction.

The bank is also poised to dispose of more than $200 billion of loans and securities to shore up capital, a person with knowledge of the plan said March 24. Pandit will probably let them pay off as they come due, rather than sell them at a loss, the person said. The stakes may include $49 billion of securities the bank had to take on when it bailed out seven off- balance-sheet investment funds. READ MORE