Federal Reserve Chairman Ben Bernanke says the recession is over, the Dow swaggers above 10,000 and President Barack Obama assures us the worst is behind us. Job numbers recently released by the Bureau of Labor Statistics back them up, showing a net job loss for November of just 11,000. The nation’s unemployment rate also dipped slightly, from 10.2 percent in October to 10 in November.
They’re all signs that Citigroup CEO Vikram Pandit says point to an economic recovery.
“It’s interesting to see the number of job losses is narrowing steadily,” Pandit said in a recent roundtable event with reporters at Citi’s headquarters in Long Island City. “There’s expanding economic activity, corporate activity, and housing declines are lower. All these trajectories are going in the right direction.”
The CEO also expanded on the bank’s efforts to aid the recovery and to minimize the foreclosure crisis in Queens.
New York’s housing market suffered a severe fallout in the wake of the housing crisis in the United States, with over 50,000 new foreclosure filings in 2008 alone, a 30 percent increase over the preceding year.
In Queens, more than 5,000 properties received foreclosure notices, according to the Furman Center for Real Estate and Urban Policy — a New York academic research center devoted to the public policy aspects of land use, real estate development and housing. St. Albans and South Jamaica were the worst hit, with more than 540 homes going under the hammer in 2008.
But Pandit says despite the dismal numbers, things could have been worse.
“In New York City we should consider ourselves fortunate. There are issues here too, but compared to the rest of the country, we are in a much better position,” he said, referring to Citi’s foreclosure prevention program.
“In NYC, our numbers are good,”he said, asserting that “Out of every 77 people with mortgage problems, 76 have managed to retain their homes.”
The CEO urged Citi customers to use this program by going to their local branches and asking for help with their mortgage modification. “A lot of times people are reticent to ask for help,” he said, “but we urge you to call in our help lines or go to the branch.”
For homeowners with language barriers, Pandit urges them to seek help via local community-based organizations who can then direct them to this program.
Loan modification, however, is just one aspect in Citigroup’s restructuring as it adapts to the “new normal,” Pandit said. With $1.9 trillion in assets, Citigroup is the third-largest U.S. bank.The CEO, who has shrunk Citigroup by about 25 percent, said the problem at his institution wasn’t size but strategic clarity.
After spinning off the Travelers insurance business and reducing the amount of risky trading that Citigroup does, Pandit said the bank has narrowed its focus. It also shed thousands of jobs, both directly and by severing ties with foreign subsidiaries.
Now Citi hopes to achieve a culture that practices responsible finance that recognizes that “banking is a means to an end and not an end in itself,” Pandit said.
The CEO has a special relationship with Queens, having moved here from India when he was 16. In the glass-fronted Citi Headquarters, he said the borough and the city should look at the future with optimism.
While refusing to comment directly if there are any more layoffs in store for Citi employees at L.I.C., he reflected that it had been “an interesting year. We have done a lot as a company to put our house in order. We have raised capital, directed operating leverage by cutting costs. We feel like we are in a fundamentally different place.”
He is confident the company can keep itself profitable and repay the $45 billion it received from the U.S Treasury’s Troubled Asset Relief Program.