Citi to Shed $500 Billion in Assets

On its annual investor day conference call early Friday, mega-bank Citigroup (NYSE: C) announced it would be selling some $500 billion in “non-core, legacy assets” over the next several years as it attempts to streamline operations after taking heavy credit crunch-related losses.

Citi’s CEO Vikram Pandit announced the move Friday from the company’s midtown Manhattan headquarters. He said the $500 billion figure represents about 22 percent of the firm's total assets. The asset reductions will take years, he noted and "will improve the quality of earnings."

"These reductions will release capital that we could use in our other businesses," Pandit said.

Pandit attached revenue growth goals for the plan to different units. He expects the global credit card business to increase its revenues 7 percent over the next two or three years. The company also expects 8 percent growth from consumer banking, 9 percent from both securities and banking and wealth management, and 14 percent from transaction services.

Citi said the asset reductions will be broken down as 4 percent from auto holdings, 5 percent from subprime collateralized debt obligations, 6 percent from highly leveraged commitments, 11 percent from structured investment vehicles, 35 percent from real estate and 39 percent from other assets.

The bank did not comment on whether it will be selling charged-off or consumer debt portfolios as a part of the program.

In addition to the asset reductions, Citi has cut some 15,000 jobs over the past year.

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