The recent high-level management shake-up at Citigroup Inc. will speed up the integration process at the newly merged financial services giant, Citigroup co-chairman and chief executive Sanford I. Weill said Thursday.
"It's going to happen faster," he said at the Securities Industry Association annual conference here.
Mr. Weill said that under Citigroup president James Dimon, Citicorp and Travelers "were just not getting it together." Mr. Dimon, who had been in charge of creating a cohesive corporate financial services business at Citigroup, resigned Sunday.
In a press briefing at the securities industry's premier event, Mr. Weill said the $700 billion-asset company would be unveiling more structural changes in the weeks ahead. He indicated that not all of Citigroup's disparate business units will be forced to operate under a single organization.
"Some will merge, some will work side by side," Mr. Weill said. "We're not going to force homogenization where it doesn't make sense."
Much of the responsibility for the integration process will now fall to Michael A. Carpenter and Victor J. Menezes, who have been named to succeed Mr. Dimon. Their challenge-and the undoing of Mr. Dimon-will be to integrate the conservative Citibank with the freewheeling Salomon Smith Barney.
Criticized by Wall Street for their lack of corporate relationships and unremarkable track records, Mr. Menezes, from Citicorp, and Mr. Carpenter, from Travelers, earned praise from Mr. Weill, who said they performed well for their companies.
Mr. Weill also praised Mr. Dimon. He faulted the entire organization for Citigroup's integration problems and its disappointing third-quarter results.
"We're all to blame," Mr. Weill said. "It was a very hard thing for Jamie to leave." Salomon's heavy trading losses showed a lack of foresight, he said.
Mr. Weill denied that Mr. Dimon's departure was the result of a hastily arranged marriage. The Citigroup deal was hammered out in about a month following a day and a half of negotiations between himself and Citicorp CEO John Reed, he said.
Even at that early stage, management expected problems in bringing together Salomon and Citibank, Mr. Weill said. That concern clearly was not enough to put the brakes on a deal that Mr. Weill said gave Citigroup the balance sheet needed to be a truly global force.
And he pointed out that it has been less than a month since the merger officially closed. "You've got to think before the process that everything's going to be hard. We took nothing for granted."
Mr. Weill, who delivered a major address to the 770 securities executives here, said the integration problems at Citigroup became increasingly apparent at a management meeting at the Greenbrier in West Virginia two weeks before Mr. Dimon's departure. There, executives divided into eight focus groups to identify priorities.
First among their concerns was the consolidation of corporate banking. But the groups also determined there were "too many opportunities" and that it was necessary to "concentrate on a few and make them work."
Those opportunities include cross-selling Travelers products around the world where Citibank has a presence, with a particular focus on less- developed economies, Mr. Weill said.
"In lots of emerging-market countries, insurance represents 1.5% of the gross domestic product. In developed countries like the United States, it represents 8%."
The integration of commercial and investment banking has always been hard, Mr. Weill said.
"We have a business in two parts: consumer and corporate banking. On the consumer side it came together very smoothly ... that hasn't happened with our corporate side, especially in the emerging markets bank and global relationship bank."
Irving Weiser, chairman and CEO of Dain Rauscher Inc. and chairman of the Securities Industry Association, applauded Mr. Weill for speaking when Citigroup is under criticism.
"I thought it was classic Sandy Weill," Mr. Weiser said. "He deals with the issues and tells you what is on his mind."
