Nuns, union pension plan seek Citigroup breakup - Boston News, Weather, Sports | FOX 25 | MyFoxBoston

Nuns, union pension plan seek Citigroup breakup

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BOSTON (AP) -- A proposed shareholder resolution filed on behalf of a group of Benedictine nuns and a union pension fund asks Citigroup's board to consider separating one or more of the bank's business units from the parent company.

The proposal requests the board to appoint a committee of independent directors to explore "extraordinary transactions that could enhance stockholder value, including the separation of one or more of Citigroup's businesses," the filers of the resolution said in a news release Wednesday.

The proposal was filed by Trillium Asset Management and the AFSCME Employees Pension Plan.

Trillium is a Boston-based investment adviser that filed the resolution on behalf of one of its clients, the Benedictine Sisters of Mount St. Scholastica. Trillium clients include wealthy individuals, foundations, endowments, and religious institutions such as the Benedictine Sisters of Mount St. Scholastica, an order of 144 nuns based in Atchison, Kan.

Trillium clients own about $9 million worth of shares in Citigroup, said Jonas Kron, a vice president at the firm.

The AFSCME pension plan's Citi shares are currently valued at nearly $2.8 million.

The resolution's filers have met requirements to bring the proposal to a vote at Citigroup's annual shareholder meeting next spring, Kron said.

Citigroup Inc. spokesman Mark Costiglio declined to comment on the shareholder proposal. But he said that Citi "has sold more than 60 businesses and reduced assets in Citi Holdings by more than $600 billion since the credit crisis began."

Matthew Patsky, Trillium's CEO, said in a statement that Citigroup has made progress since the 2008 financial crisis to simplify its business model and limit financial risks. But he said that progress "has been slow and incomplete," and added that Citigroup "remains burdened by excessive complexity."

The resolution comes after Vikram Pandit's surprise resignation as Citigroup's CEO on Oct. 16. Chief Operating Officer John Havens left the New York-based bank at the same time.

Citi gave no explanation at the time, but it was widely reported that Pandit had fallen out of favor with the company's board. The bank was embarrassed by several missteps including failing a financial checkup this spring with the Federal Reserve, which refused Citi's request to raise its dividend.

Pandit's replacement is Michael Corbat, who had been the CEO of Citigroup's Europe, Middle East and Africa division. He also ran Citi Holdings.

Under Corbat, many analysts expect Citigroup to pursue a strategy of more cost-cutting, more shrinking and more focus on traditional banking, like making loans. Citigroup has about 262,000 employees, and generated about $78.4 billion in revenue last year. Once the nation's largest bank, Citi is now the third-largest, behind JPMorgan Chase & Co. and Bank of America Corp.

Shares of Citi fell 25 cents to $35.91 in midday trading. The stock is up about 37 percent this year, but was decimated in the 2008 crisis and remains far below where it was when Pandit took over in 2007.

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