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For more than a year, Sanford Weill, CEO of Citigroup (C
), has maintained a low profile for a man used to being the center of attention. Between the investigations by Congress and the New York Attorney General's office into Citigroup's dealings with Enron, and conflicts of interest at investment bank Salomon Smith Barney (a Citicorp division), Weill's public appearances were basically limited to statements delivered through a spokesperson. Sure, he attended the bank's annual meeting in 2002, but otherwise Weill lieutenants like longtime corporate counsel Charles Prince III or CFO Todd Thomson did most of the glad-handing with investors and the media.
All that became history, however, on Jan. 28 as Weill showed some of his old zip in a speech at Salomon Smith Barney's financial-services conference in New York. Weill used the stage to take digs at Citi's biggest critics in 2002, wax poetic about his hopes that the world will learn to make money -- not war in 2003 -- and tout Citi as a financial-services company on the rise this year.
Weill admitted that things in 2002 had been tough. Citi had problems with corporate loans, was hurt by the financial turmoil in Argentina and Brazil, and in the fourth quarter took a $1.3 billion charge to reserve for lawsuits that could be brought by Salomon Smith Barney clients. Despite all the charges, "we were the most profitable company in the world," with $15 billion in earnings, Weill declared. Citi's competitive position now "is stronger in nearly every business than it was a year ago," he added.
DIRECT HIT. He didn't mention that Citi's stock is down about 20% from a year ago, in part because the state and federal investigations proved highly embarrassing to the financial giant, exposing areas where corporate governance was lacking. Among the disclosures: e-mail suggesting that one analyst made stock recommendations based on Weill's help in getting his kids into a prestigious preschool.
Weill was defiant on Jan. 28, dismissing the accounts as so much inside baseball. "There is a world outside New York and Charlie Gasparino," Weill said, taking a direct shot at The Wall Street Journal reporter who publicly uncovered much of the Spitzer investigation. Egged on by laughter from the crowd, Weill added, "See...that's why they don't let me out." Citigroup, he went on to say, had scored high on the Financial Times' ranking of the world's most respected companies.
Weill similarly dismissed Prudential Securities analyst Michael Mayo, another thorn in his side. Mayo wrote in September that Citi could eventually pay as much as $10 billion in litigation costs related to the investigations. "Now, that's why we should have hired Mayo when he came to us looking for a job," Weill joked when he was questioned about the estimate. Mayo was let go from previous employer Credit Suisse First Boston after the he made negative calls on some banks he covered.
SUNNY SANDY. Perhaps more surprising than Weill's zingers, though, was his call for world peace and understanding in the pursuit of prosperity. "If we have peace in this world, and people can get back to thinking how the world can benefit by trading with each other rather than fighting with each other, it is the best way to grow the middle classes in a lot of countries," said Weill. Citi has concentrated on establishing business in formerly communist countries such as Russia and has made inroads in China. Weill told the bankers he remains optimistic about those prospects.
The CEO ended by giving attendees what amounted to a motivational pep talk. Times are tough, he acknowledged. "Everybody is thinking about all sorts of terrible things right now," Weill said. "I think that with the amount of gloom and sickness out there, we're very close to a bottom."
Then, Weill shared his own upbeat philosophy with the crowd: "I wake up every morning positive. I may go to bed negative, but I wake up positive." Looks like it may be working for him.
By Heather Timmons in New York Edited by Douglas Harbrecht
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Copyright 2003, by The McGraw-Hill Companies Inc. All rights reserved.
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