In an effort to strengthen its investment banking business team, Citigroup Inc. (C) has hired Samuel Di Piazza, Jr. who retired as Global CEO of PricewaterhouseCoopers International Limited (PwC) in September 2009, after serving in that position since 2002.
Mr. Di Piazza has joined Citi as vice chairman in the Institutional Clients Group and will be a member of the Senior Strategic Advisory Group. He comes with leadership expertise and international experience in both developed and emerging markets, a quality that is expected to attract new customers and maintain Citi’s global institutional client base.
Plagued by severe losses during the financial crisis, Citi was ultimately rescued by the government bailout. The company has been administering several repositioning efforts to manage and grow its business since the past several quarters. After suffering billions in losses in 2008 and 2009, Citi ultimately swung back in 2010, posting a profit of $10.6 billion.
Citi suffered losses in business and key employees, and its reputation was hit back following the financial crisis and the government bailout. However, as part of rebuilding its lost glory and business, Citi is strategically hiring senior executives from its competitors such as J.P. Morgan Chase & Co.(JPM) and Bank of America Corp. (BAC) as well as well known entities who have served in important government positions.
In the past, Citi has hired Peter Orszag, former White House director of the Office of Management and Budget, and Carlos Gutierrez, the former Commerce Secretary. Earlier this month, the company hired Doug Baird, a managing director in U.S. equity capital markets who served at its rival company, Bank of America Merrill Lynch.
We believe that such strategic hiring should help the company increase its top line. With an impressive global footprint, the hiring of Mr. Di Piazza is a strategic fit. Also, the addition to its executive pool from its rivals would aid the company in expanding its client base, efficiently servicing them and thereby growing its top line in a competitive landscape.
Yet, regulatory issues and the sluggish economic recovery remain headwinds and its top line remains restricted.
Citi shares maintain a Zacks #3 Rank, which translates to a short-term Hold recommendation. Our long-term recommendation for the stock is also reiterated at Neutral.
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