Citi: A Test for Big-Bank Simplicity

Matt is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

Citigroup (NYSE: C) ain't no Bank of Hawaii (NYSE: BOH).

Tropical location aside, there's a gulf between the two banks when it comes to the complexity -- or, at least, the percieved complexity of the operations. But one thing they do share in common is that when a turnaround was needed, Michael O'Neill showed up. 

But will it be as simple and straightforward for O'Neill at Citi (where he's Chairman) as it was when he was at B of H (where he was CEO)? Reuters notes:

O'Neill, who hand-picked new CEO Michael Corbat, has an uphill task ahead of him. Citigroup is groaning under $171 billion of assets it wants to shed, has high expenses, and its profitability lags behind that of such competitors as JPMorgan Chase & Co.

And O'Neill faces the same question that kept him from being a contender for the Citigroup CEO spot: while he can fix a smaller bank, can he revamp a behemoth as complicated as Citigroup?

This could be a pretty interesting test of battling what I think is -- to at least some extent -- the illusion of endless complexity at big banks. Indeed, Citi has a heck of a lot more going on than Bank of Hawaii, but at the end of the day, can a manager with a back-to-the-basics view of doing banking well -- that is, gathering deposits and lending them out wisely -- help bring some life back to a too-big-to-fail giant? 

I want to argue yes, but I'll admit, the jury is far from in.

TMFKopp has no positions in the stocks mentioned above. The Motley Fool owns shares of Bank of Hawaii and Citigroup Inc. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

blog comments powered by Disqus