Nation & World Briefs 10-17-12 Shrinking Citigroup could get smaller yet following Pandit


NEW YORK -- The incredible shrinking bank may have to shrink more.

In the hours after Tuesday's surprise announcement that Citigroup CEO Vikram Pandit was stepping down, speculation was rife, and facts scant, about what lay ahead for the nation's third-largest bank.

But one possibility given high odds by financial analysts: More cost-cutting, more shrinking and more focus on boring, traditional banking, like making loans.

"It's going to get a lot smaller," said Gerard Cassidy, a long-time banking analyst at RBC Capital Markets. "You've got to shrink to make big money."

In the nearly five years since Pandit took over as CEO, he shed businesses and cut jobs. Staff fell from 375,000 when he took over to 262,000.

Once the nation's largest bank, Citi is now the third-largest, with $1.9 trillion in assets. It trails JPMorgan Chase, with $2.3 trillion, and Bank of America, with $2.1 trillion.

Citi's new CEO is Michael Corbat, 52. He had been the CEO of Citigroup's Europe, Middle East and Africa division. He also ran Citi Holdings, which contains assets that Citi wants to sell. Because Corbat isn't widely known, analysts Tuesday were not sure how he might change the direction of the company.

Daughter offers no clues: The daughter of one of the world's most sought-after drug lords didn't share information that might lead to her father's capture after she was detained on an immigration violation, a U.S. official said Tuesday in San Diego. Alejandrina Gisselle Guzman Salazar, 31, was charged Monday with fraud and misuse of visas, three days after authorities arrested her at San Diego's San Ysidro port of entry, the nation's busiest border crossing. The official said Guzman Salazar has been "a dead end" in the search for Joaquin "El Chapo" Guzman, the elusive leader of Mexico's Sinaloa cartel.

Specter's roots traced: Friends and colleagues of former U.S. Sen. Arlen Specter trace his centrist political views to a childhood spent in the only Jewish family in Russell, Kan. There, Specter learned tolerance and tenacity, skills they said he honed as he crossed party lines and served 30 years in the U.S. Senate, longer than anyone from his adopted home state of Pennsylvania. Specter's funeral was held Tuesday in Narberth, Pa., two days after he died at his Philadelphia home following a third bout with cancer. He was 82.

Scalia's car ticketed at Union League: Even if you're a member of the country's highest court, run afoul of the Philadelphia Parking Authority and you'll find a ticket on your windshield. Just ask U.S. Supreme Court Justice Antonin Scalia. The National Constitution Center reports on its "Constitution Daily" blog that Scalia was in town Monday for an appearance at the Union League, a tony private club downtown. Scalia's car was ticketed despite a Philadelphia official police business placard on its dashboard. The Constitution Center post jokes that although Scalia is among the court's conservative judges, the ticket is nonpartisan.

Ford recalls Fiesta subcompact: Ford is recalling more than 154,000 Fiesta subcompacts to fix a problem with the side air bags. The company says that if the front passenger seat is empty, the side air bag won't inflate to protect rear-seat passengers in some crashes. Ford says it doesn't know of any crashes or injuries linked to the problem. The recall affects Fiestas from the 2011 through 2013 model years. They were built in Mexico from Nov. 3, 2009-Sept. 21, 2012. Dealers will reprogram the computer that controls the side air bag so it inflates even if no one is in the front passenger seat. The repair will be done for free.

GM to start producing electric Cadillac: General Motors says production is set to begin late next year on a luxury version of its Chevrolet Volt hybrid. The automaker said Tuesday the Cadillac ELR will be assembled at the Detroit-Hamtramck Assembly plant. That plant makes the Chevrolet Volt, Opel Ampera and Holden Volt. The Cadillac will run on electricity and carry a four-cylinder gasoline engine to generate power when the batteries run out of juice. It's based on the Cadillac Converj, a concept car unveiled in 2009 at the Detroit auto show. The company will invest $35 million at the plant, which hasn't produced a two-door car since the 1999 Cadillac Eldorado.

Signs money-laundering law: Mexican President Felipe Calderon has signed into law a ban on large cash transactions as part of an effort to fight money laundering that experts estimate may amount to around $10 billion per year in Mexico. The bill forbids buyers and sellers from giving or accepting cash payments of more than a half million pesos ($38,750) for real-estate purchases. It also forbids cash purchases of more than 200,000 pesos ($15,500) for automobiles or items like jewelry and lottery tickets. The fact that the law took two years to move through Congress illustrates the sensitive nature of such rules in a society where small businesses and retailers, as well as gangsters, have long conducted many of their transactions in cash. It goes into effect in about 90 days.

Accuses Libyan militias: Libyan rebels appear to have "summarily executed" scores of fighters loyal to Moammar Gadhafi, and probably the dictator himself, when they overran his hometown a year ago, a human rights group said today. The report by Human Rights Watch on alleged rebel abuses that followed the October 2011 capture of the city of Sirte in the final major battle of the eight-month civil war is one of the most detailed descriptions of what the group says were war crimes committed by the militias that toppled Gadhafi, and which still play a major role in Libyan politics today.

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