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Take your pick: Merrill or Citigroup?
6 November 2007
Both have ejected chief execs after making big losses. Both are left without any obvious bodies to man the tiller. Which would you rather work for?
Forget the fact that it’s writing down US$8bn to US$11bn (and maybe more) on sub-prime related products, Dick Bove, analyst at Punk Ziegel & Co. in the US, says the answer is clear: “There’s no question – I’d choose Citigroup.”
Bove says the big bank’s attractions are legion: “I’d get low priced options and it’s a bigger company with more diversified opportunities than Merrill. It has a wider range of products, a stronger capital base, and a better international name.”
By comparison, the implication is that Merrill is parochial and overly focused on the likes of corporate finance advisory, private client broking and risky areas of fixed income.
On the other hand, the broader-based Citigroup stands accused of dabbling in everything and succeeding at nothing. “Citi's core problem, and Prince's core failure, isn't just the recent market losses. It's also the conspicuous lack of successes elsewhere to compensate for them,” says the Wall Street Journal.
So which bank would you opt for? Or is now the time to steer heavily clear of both – given a broader choice Bove says he’d park himself over at JPMorgan, which appears to have navigated the credit crisis a lot more cleanly.
I would clearly stay away from Citi, ofcourse being an ex-citi guy myself, the choice is pretty certain!
Clearly, going forward success will depend on being extremely strong in few areas, than dabbling in all areas. And, Merill fits this bill more than Citi. But, honestly I would work for neither!
Badri 07 Nov 2007
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