I’ve been harping for so long by now that Citigroup needs to be broken up that regular readers can likely recite my argument, chapter and verse, better than I can. Anyway, it boils down to this:

1. Citi’s various businesses (its commercial bank, investment bank, wealth management unit, and global consumer finance operation) would almost certainly grow faster on their own than they’re growing now as part of a big clunky conglomerate. Reason: smaller, focused companies, which are what the Citi progeny would be, are more effective competitors than mammoth generalists like Citi. If nothing else, they’d be more successful recruiting top talent and be simpler to manage.
2. The capital allocation synergies that Citi apologists point to in defending the status quo are largely a myth. The company is so large and unwieldy that even a highly competent CEO/capital allocator would have trouble deploying the company’s capital optimally across all its business. Citi’s management team is no one’s idea of a competent capital allocator, and is hopelessly inadequate to the task.
3. Citi’s current growth strategy, which involves such bright ideas as opening new retail branches in Boston and Philadelphia and buying a bank in Germany, is doomed to fail. The company has virtually no discernible sustainable competitive advantage in any area that it says it plans to expand.

Why not do partial IPOs of Citi’s various businesses?

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