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About Michael Corbat

Michael Corbat is an angel investor in New York, New York.

Michael Corbat Headquarter Location

New York, New York,

United States

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Latest Michael Corbat News

Citigroup CEO Fraser fights to sell turnaround plan to investors

Jan 14, 2022

01/14/2022 | 02:17pm EST Message : *Required fields NEW YORK, Jan 14 (Reuters) - Citigroup Inc ChiefExecutive Jane Fraser faces a struggle to convince skepticalanalysts and investors that she can turn the bank around despiteoverseeing a radical overhaul in less than a year at the helm. Fraser took over at the helm of the Wall Street bank inFebruary 2021, tasked with transforming a business whose shareprice had lagged rivals like JPMorgan Chase & Co andBank of America during her predecessor Michael Corbat'seight years at the helm. Since her appointment, she has sought to simplify the firm,overseeing its biggest revamp since the 2007-09 financialcrisis. The bank announced plans to exit non-core businesses,including consumer franchises in 13 markets across Asia, Europe,the Middle East and Africa last April. On Tuesday, it doubled down, saying it planned to sell orspin-off its Mexican consumer business, which Fraser had run ashead of the bank's Latin American businesses, prior to becomingCEO. The bank went further still on Thursday, announcing the saleof its consumer businesses in Indonesia, Malaysia, Thailand andVietnam. The decision to sell the Mexican business, which Fraser hadpreviously said had the scale to succeed which the bank's Asianconsumer franchises lacked, is arguably her boldest move yet inreshaping the bank. Citi's CFO Mark Mason said on Friday that the decision toexit that business was driven by the bank's strategy to focus onits institutional business. While the Mexico consumer businesshad delivered good returns, it would be more valuable to anotherowner, Mason said. However, Citigroup's share price continues to lag rivals,suggesting that investors are yet to be convinced that Fraser'sturnaround plans will bear fruit anytime soon. "It is a show-me situation," said analyst Dick Bove of OdeonCapital. "This company has been mischaracterized, mismanaged,and poorly handled by one administration after the other for 25years," he said. Since Fraser took up her post last February, its shares havegained 3% compared to JPMorgan shares rising 14%, Bank ofAmerica shares gaining 40% and Wells Fargo rising 55%. On Friday, the shares were under further pressure, down 2.5%after Citi released earnings showing a 26% slump infourth-quarter profit as it took a hit from higher expenses andweakness at its consumer banking unit. Fraser was questioned by analysts on Citi's conference callon the direction of the bank, answering that she aimed for it tobe "the preeminent bank for institutions with cross-borderneeds" and was focused on improving shareholder value. To be sure, Fraser is less than a year into her mission toturn the bank's fortunes around and investors who support herstrategy stress that it will take time for the changes toimprove the bank's performance. However, she must convince analysts and investors scarred byyears of disappointment with previous efforts to restructure thebusiness. Prior to handing over the reins to Fraser, Corbat hadalso exited dozens of non-core businesses. The business had sprawled under the leadership of SandyWeill, who led the bank between 1998 and 2003. Weill led thebank through an acquisition spree before its collapse andsubsequent $50 billion government bailout. Bove cited the failed strategies of six previous CEOs beforesaying that Fraser's plans alone are not enough to attractinvestors. The bank habitually lags the financial performance of peersand has been under enhanced supervision from regulators for manyof the years since its bailout during the financial crisis. When Citigroup last changed its leadership in 2012, itsshares surged and remained elevated for months after Corbat wasinstalled in place of Vikram Pandit. Corbat agreed in September 2020 to give up the post toFraser at the end of February 2021. At the time the bank facednew questions over its financial controls, including that itshould have caught an erroneous payment of nearly $1 billion toholders of bonds for which it was the trustee. Fraser's strategy is designed to simplify the company,improve its focus on its institutional businesses and put itscapital to better uses. "The new Citi is a simpler firm that has greater focus as aglobal banking, payments, and investing provider tomultinational firms and institutions, growing corporates, andaffluent individuals," Wells Fargo analyst Mike Mayo, who has an'overweight' rating on the stock, said in a research note. However, the plan has not yet lifted the stock. Bove, who applauds Fraser's moves so far and recommends theshares, blames the lousy share performance on "investorexhaustion." (Reporting by David Henry in New York; Editing by Matt Scuffhamand Nick Zieminski)

Michael Corbat Investments

1 Investments

Michael Corbat has made 1 investments. Their latest investment was in Suade Labs as part of their Series A on November 11, 2021.

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Michael Corbat Investments Activity

investments chart

Date

Round

Company

Amount

New?

Co-Investors

Sources

11/17/2021

Series A

Suade Labs

Yes

2

Date

11/17/2021

Round

Series A

Company

Suade Labs

Amount

New?

Yes

Co-Investors

Sources

2

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