Charlotte's Web

Did Vikram Pandit really just say what Heidi Moore says he said, on this morning's conference call?

The plan is to fold the U.S. retail bank into the Wachovia team.

If I have this right, Citigroup might have bought Wachovia, but in effect, as part of the same deal, Wachovia has taken over Citibank. Which means that two of the three largest retail banks in America are now based in Charlotte, North Carolina.

Clearly this deal was done very quickly, and things might change. But if the retail bank is now to be run by the Charlotte-based Wachovia team, that's a really good move by Pandit, who has no real ability or credentials in that area. Wachovia, by contrast, knows retail banking very well, and is extremely good at it.

Maybe this helps explain why Citi shares are trading higher on a day when the rest of the stock market is sharply down, and despite the fact that Citi's going to have to dilute its present stockholders even further in order to make this deal work.

Or it could just be that Citigroup now boasts a deposit base of $1.3 trillion. With that sort of might, even barely-competent managers can make huge amounts of money.

Update: Heidi emails me the transcript. Pandit did indeed say it:

"Our plan is to fold our US retail bank, which is about a third the size of Wachovia's retail bank, into the Wachovia platform and the team is extremely strong -- the Wachovia team, Terri Dial, Marty Lippert."

Wachovia is three times the size of Citibank's retail operations?! I had no idea.