EXCLUSIVE: Mayo says Citi can’t be trusted

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Securities analyst Mike Mayo ramped up his increasingly bitter battle with the management of Citigroup (C: 3.70 ,-0.04 ,-1.20%) Monday morning issuing a note stating that the big bank can’t be trusted to provide investors with accurate disclosure about its financial condition or future plans to make money, and that the firm is setting the stage for future problems similar to those that nearly caused the bank to fail two years ago, prompting a massive government bailout.

“We believe that Citigroup’s financial targets can encourage short-term excesses over long-term prudence,” Mayo wrote in a note to clients titled “A Matter of Trust.” Mayo, an analyst at the securities firm CLSA, added: “Citi has an aggressive financial target of 5% asset growth when so much of its past problems stem from excessive asset growth.”

Mayo also once again took issue with Citigroup's account as it relates to so-called Deferred Tax Assets, which are tax credits that under certain circumstances can be used to bolster capital levels and profits. Mayo says Citigroup relies on DTAs to strengthen its balance sheet more than any other of the big banks, and stated, as he has in recent days, that the bank is failing to write down substantial portions of its DTAs, a charge that Citigroup has denied.

Full story: – EXCLUSIVE: Mayo Says Citi Can’t Be Trusted

Jeff Winkler (admin)