RSS Feeds Facebook Facebook Twitter Twitter
Frontpage | About | Contact | Subscribe

Citigroup Inc. Delisted From Dow

The financial downturn has definitely taken its toll on a lot of banking companies. Undeniably one of the worst hit was Citigroup. Now, it seems that the company’s disgrace is not yet over. The Dow Jones Industrial announced that Citigroup Inc will be delisted from the index. It will be replaced by Travelers Cos (TRV) in the flagship 30-stock index, starting June 8.

Since mid-January, the shares of Citigroup were already trading at below $5. In fact, it even dropped as low as 97 cents on March 5 after huge losses were announced and the government had to bail them out. Currently, it is estimated that taxpayers actually owns up to 34 percent of Citigroup. Who would have thought that this would happen to the world’s largest bank?

Established in 1998 with the merger of the Travelers Group and Citicorp, it was nicknamed as a “financial supermarket” because it carried virtually all financial products in the market. Later on, the company spun off its Travelers’ arm. The removal of Citigroup signals the end of company’s 12-year status on the Dow Jones Index.

Explaining why it took some time before Citigroup was removed from the Dow despite months of weak performance; the Dow Jones Editor-in-Chief Robert Thomson explains “We were reluctant to remove Citigroup at the height of the financial frenzy”. The editor further added that they hoped the company can rejoin the Dow in the future once it has refashioned itself.

In an effort to assume investors and the public, Citigroup said that this development will not affect the bank’s strategy to get back to sustained profitability. Another interesting bit of news is that Citigroup has started a brokerage venture together with Morgan Stanley (MS). The bank will transfer its Smith Barney subsidiary to get $2.75 billion and a 49 percent share in the new venture.

With the delisting of Citigroup, only two banks are left standing: JPMorgan Chase & Co (JPM) and Bank of America (BAC). There are still other financial services companies in the Dow though. For example, General Electric Co (GE) and American Express Co (AXP) both have financial arms. Previously, Kraft Foods Inc (KFT) has replaced the American International Group (AIG) in the Dow.

Share and Enjoy:
  • Digg
  • Sphinn
  • Facebook
  • Mixx
  • Google
Related Articles:

Category: Banking, Lending

Tagged: , ,

Leave a Reply

Subscribe to CLB Posts

Stay up-to-date on Financial news, articles, and announcements:

Spread the Word

Credit Card Widget