Whatever Happened to Citicorp?

Dana Cimilluca notes that shares in Citigroup, today, are below the level at which shares in Citicorp were trading before it merged with Travelers. Now, that's not necessarily a fair comparison: Citigroup, today, has a market capitalization of $135 billion, which compares to a market capitalization of $70 billion for Citicorp and Travelers combined on April 6, 1998, just before the merger was announced. Even after the announcement, the two together were it was only worth $84 billion.

Clearly, however, Citicorp shareholders have not seen any benefit from holding their newfangled Citigroup shares over the past ten years, and they could be forgiven for blaming the merger with Travelers. After all, Citi's recent losses can generally be placed at the feet of the wizards at its Corporate and Investment Bank, nee Salomon Smith Barney. The merger greatly increased the amount of damage those wizards could do, since they found themselves, once they were incorporated into Citigroup, with a vastly larger balance sheet to lend and leverage and generally put at risk.

And I'm sure a bunch of them are wondering how much of their money found it's way into Sandy Weill's pocket, too. They probably think it's quite right and proper that he should be part of the recapitalization plan.