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CEO Pandit says Citi had strong 2009 start - memo

Vikram S. Pandit, President and Chief Operating Officer of Morgan Stanley's Institutional Securities division, speaks at the Reuters Finance Summit in New York in this November 10, 2004 file photo. REUTERS/Peter Morgan

LONDON (Reuters) - Citigroup was profitable in the first two months of 2009 and is confident about its capital strength after tough internal stress tests, according to a memo from Chief Executive Vikram Pandit obtained by Reuters.

Citigroup declined to comment on the memo, sent as an email to colleagues and obtained by Reuters on Tuesday. The memo was accompanied by speaking notes for Pandit.

The memo came after the cost of insuring Citi’s debt against default hit a record on Monday.

In the notes, Citigroup said it was having its best quarter-to-date performance since the third quarter of 2007.

Revenues excluding externally disclosed marks were $19 billion in January and February alone, almost reaching the $21 billion of the first quarter last year.

“That said, we are still one month away from the end of the quarter and market volatility could alter results,” the bank said in the speaking notes.

The memo also said that the bank was confident about its capital strength after it had done stress tests, using assumptions that were more pessimistic than those of the U.S. Federal Reserve.

In the memo, Pandit said he was disappointed with Citi’s stock price and “broad-based misperceptions about our company and its financial position”.

“We believe our credit spreads are disconnected from our condition and are inconsistent with the government’s announcements regarding support for the financial system.”