Citigroup to sack more than 11,000 jobs

NEW YORK — Citigroup's move to sack more than 11,000 workers may foreshadow bigger cuts as its newly installed chief executive shakes up the lumbering Wall Street behemoth.

The New York bank's restructuring — coupled with a $1-billion write-down in the fourth quarter — came as Citi, like other financial giants, suffers through a hangover from the housing meltdown and struggles to adjust to the resulting regulations.

 "This is simply just the beginning," said Todd Hagerman, an analyst at Sterne Agee. Restructuring on Wall Street, as firms prune non-core businesses, is "going to be fairly painful over the next several years."

A $1-billion charge might otherwise throw cold water on a company's stock. But investors clearly approved of Citi's restructuring, which came sooner than analysts expected — only seven weeks into Michael Corbat's tenure as CEO. Citi stock jumped $2.17, or 6.3%, closing Wednesday at $36.46.

Corbat took Citi's helm after Vikram Pandit's abrupt departure from the CEO suite in October, following a long-simmering dispute with the bank's board of directors. Analysts saw Citi's layoffs as a much-needed first step, though not enough to satisfy restive investors.

"We view this move as an initial 'tremor,' and that an 'earthquake' or more radical restructuring is needed before the April 16th annual meeting to satisfy activists," Mike Mayo, a banking analyst with CLSA, wrote in a note. "While clearly a portion of these moves must have already been in the works, the moves today create a tone that the new CEO will not take half-measures."

Big Wall Street banks have been shrinking their payrolls to maintain profits in the wake of the financial crisis and sweeping new regulations aimed at reducing risk.

As of Sept. 30, Bank of America's head count had fallen 6% from the previous year to 272,600, regulatory filings show. Morgan Stanley's payroll was down 7% to 57,726, and Goldman Sachs' payroll had fallen 5% to 32,600 over the same period.

Citi's more than 11,000 job cuts account for 4% of its global workforce of 261,000.

About 6,200 of the layoffs will come from Citi's consumer banking operations in the U.S. and around the world as the company focuses on 150 cities with the "highest growth potential," the bank said. Other cuts include 1,900 jobs in its group serving institutional clients.

The cuts include closures of 44 U.S. consumer banking branches.

Four California branches will close Dec. 14. Affected customers have been notified of the closures in North Hollywood, Santa Rosa, Fresno and at John Wayne Airport, a spokeswoman said. FDIC records show 382 of Citibank's 1,060 U.S. offices are in California, the most of any state.

"These actions are logical next steps in Citi's transformation," Corbat said in a statement. "While we are committed to — and our strategy continues to leverage — our unparalleled global network and footprint, we have identified areas and products where our scale does not provide for meaningful returns."

In addition to the U.S. branches, Citigroup will close 14 in Brazil, seven in Hong Kong, 15 in South Korea and four in Hungary. The company also said it expected to "sell or significantly scale back" its consumer banking operations in Pakistan, Paraguay, Romania, Turkey and Uruguay.

Citi said the cuts would save $900 million in 2013 and produce $1.1 billion in annual savings in 2014 and beyond.

Although the bank said it would book a $1-billion pre-tax charge in the fourth quarter, along with $100 million in related charges in the first half of 2013, Citi said the restructuring would reduce annual revenue by less than $300 million.

"That just tells you how poorly this company has been under-performing in a number of different areas over the last several years," Hagerman said. - AP/LA Times/Reuters/USA Today

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Smartphone users exposed to threats from cyber hackers

KUALA LUMPUR: About seven million smartphone users nationwide are exposed to threats from cyber hackers who make use of their gadgets to steal their money.

Bukit Aman Commercial Crime Investigation Department director Datuk Syed Ismail Syed Azizan said lack of awareness on the risks of smartphone security made users easy victims.

“The modus operandi is to send short messaging service known as Trojans to users who unknowingly will be charged when replying to the SMS,” he said. “Consumers only realise this when they are slapped with high phone bills although they did not use the service.”

The scam was detected via applications such as “Type-On” which, when downloaded, would cause smartphone users to bear the cost although they had uninstalled the application.

Lookout Mobile Security was quoted by AFP as saying that worldwide, users lost millions of dollars last year via malware and toll fraud that attacked smartphone users for accessing applications from unofficial sources rather than trusted ones such as Apple or Google online shops.

Syed Ismail said police statistics recorded from January to September this year showed that losses incurred via SMS or phone calls totalled RM21.8mil.

The hackers target users of Internet banking or phone banking by hacking and abusing the network, including the online purchases of goods.

Online purchases recorded the highest losses of RM14.5mil (1,298 cases) followed by SMS or phone call with RM3.4mil (412 cases), hacking (RM3.3mil via 24 cases) and Internet banking and phone banking with RM590,000 (74 cases). - Bernama

Pretty woman picture all it takes for Netizens to reveal all; ‘Lovers’ make Net profit

PETALING JAYA: A profile with a picture of an attractive woman is all it takes to get some Netizens to reveal personal details.

The Star, in wanting to see how easy it is to be “friends” on Facebook, showed that some Netizens were more than willing to give information like their handphone number, car registration number and house address when messaging someone that they think is single and an attractive stranger.

It was also to create awareness, as advised by the police, that people should be cautious about speaking to strangers online and should refrain from giving any personal information.

A dummy profile was set up, with a blank profile page but with a photo of a young woman.

Within the first two hours, 11 users sent a friend request.

“I've to say girl, you look beautiful!” a 20-year-old user wrote in to the dummy profile's inbox.

The person, who claimed to be a student, said he was looking for friendship and spoke at length about his ambitions, likes and dislikes during the one-hour conversation.

He willingly gave information, such as his handphone number and his address, without much hesitation.
“I'm going but maybe we can chat again tonight?” he said before ending the conversation.

Another Netizen, who identified himself as Asrul, told the dummy profile that he was a 27-year-old married man from Bandar Baru Salak Tinggi.

“Would you like to meet at a club later tonight? I can pick you up,” said the man, who also offered to pay for dinner and drinks.

When asked about his spouse, the man said his wife wouldn't find out and made a date.

He gave his handphone number and his car's registration number.

It was reported that over three people fall victim to online scams daily and that as many as 613 victims have collectively lost RM25.89mil to syndicates between January and September this year.

Federal Cyber Security and Multimedia Investigation Division director Asst Comm Mohd Kamaruddin said syndicates posing as singles online were able to persuade some Malaysians into giving compromising photos, details and even large sums of money with the promise of companionship.

He said syndicates would target and flirt with lonely individuals over several months before conning them.

“We are not saying that it is wrong to find your lover online, but people should be wary of who they fall in love with on the Net,” said Mohd Kamaruddin.

The police recently uploaded a Universiti Malaya study on the persuasive languages used by scam-mers to cheat victims online, on their Facebook page at http://www.facebook.com/PolisDirajaMalaysia.

‘Lovers’ make Net profit

KUALA LUMPUR: Every day, three Malaysians fall prey to Internet love scams syndicates and the police fear the number of cases that go unreported could be three times higher.

Federal Cyber Security and Multimedia Investigation Division director Asst Comm Mohd Kamaruddin Din said 613 victims 375 women and 238 men lost RM25.89mil to the syndicates between January and September this year.

“Last year, we recorded 876 cases amounting to losses of RM34.17mil,” he said.

He said the syndicates used several modus operandi to con their victims into falling in love and parting with huge sums of cash.

Full story in your copy of The Star  Nov 4, 2012

By AUSTIN CAMOENS and EILEEN NG

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Learning from a truly great entrepreneur

The ninth richest man in the world Li Ka-shing spoke of his humble beginnings to an empire built on shipping, banking, construction, satellite TV and real estate.

Defying the odds: Li with CKGSB dean Xiang Bing (second from left) at an event marking the 10th anniversary of the school in Beijing. - CHOW HOW BAN/The Star

IT was difficult to understand Li Ka-shing speaking in Mandarin.

I would have appreciated his wisdom more if he spoke in Cantonese at the 10th anniversary celebration of Cheung Kong Graduate School of Business in Beijing recently.

Except for Li’s “broken” Mandarin, I was captivated along with the crowd, who packed the hall to listen to what this legendary Hong Kong tycoon had to say.

He started by telling a story of his childhood and how he defied the odds predicted by a fortune teller.

“When I was 14, a fortune teller from our hometown told my mother that it might be difficult for me to have any big success as I was listless and slim to bare bones.

“My mother had lost her husband not long ago and the soothsayer’s remarks made her very miserable. She then consoled and encouraged me: ‘Ah Shing, it’s hard to predict one’s destiny and God will surely reward kind and hardworking people. If life is really hard for you, your family is there for you.’

“Of course, I trusted my mother but I had even greater faith in myself.

“I believed that the future we build for ourselves is our only destiny,” he said.

It was a simple story yet it made a huge impact on the students of the school.

The story explains how this boy from Chaozhou in Guangdong province persevered during the Japanese Occupation and later worked as a salesman before founding his plastics manufacturing factory and eventually building the Cheung Kong business empire that includes shipping, banking, construction, satellite TV and real estate.

The 84-year-old billionaire, who was ranked by Forbes as the ninth richest man in the world this year with an estimated fortune of US$25.5bil (RM77.6bil), said that tomorrow would just be another new day but the future would be something that one beholds and works on to improve himself, chase his dream and create a destiny of his own.

He said once a person attained success, he would have to move on with other goals and think of what self-values he could contribute to society.

“Looking back at my life, it was like a dream but certainly not. Seventy years have passed by and the slim and listless boy who was looked down by his fellow countryman has relied on work and self-confidence to make himself stronger yet lower his ego in pursuing his dream,” he said.

This was perhaps Li’s third official speech, entitled “The hero of action”, at his meeting with Cheung Kong students. Li and his Li Ka Shing Foundation donated a great deal of money in the founding of the school in 2002.

In his first speech entitled “The art of making money” 10 years ago, Li said that as business leaders, they would need to possess foresightedness, innovativeness and international perspective and take good control of the latest and most accurate information to make the right decisions, while maintaining a good rapport with their employees.

Li’s second speech – “The art of devoting” – delivered in 2004, touched on the spirit of giving back to society after one had amassed a fortune. He said there were businessmen who became wealthy by doing illegal business in Hong Kong but these people would falter faster compared to those who upheld their principles of doing proper business.

From the art of making money to the art of giving back and now back to the very courage to make the first move and challenge the odds, the students have certainly learned a spectrum of knowledge and experience from one of the most respectable tycoons in China.

At the 10th anniversary celebration, another legendary entrepreneur Liu Chuanzhi also offered his advice to the students, professors and staff of the school.

The founder of the Lenovo Group, which is the second largest computer maker in the world, said many senior executives in Lenovo were not trained in business administration but the emergence of graduate schools in China in the past decade had provided them with a chance to take up executive MBA programmes.

“My hope for all graduate business schools is that they are not only able to teach their students how to cook but more importantly how to come out with the recipe,” he said.
The crowd applauded at the end of Liu’s address, awaiting their turn to build an empire of their own in this opportune era in China.

Made In China
By CHOW HOW BAN The Star/Asia News Network

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 Building an innovative society 

China making economic mark in Africa

The Chinese presence in Africa is quite extraordinary and the continent collectively is the third-largest recipient of Chinese outward foreign direct investment of nearly US$90bil.

AFRICA, with its one billion population and surging birth and economic growth rates, is and will be the next economic battlefield, a terrain that will be fought over by Chinese, Indian, American and European investors.

While Malaysia is a small fry among this company, we have a surprisingly high profile thanks to Tun Dr Mahathir Mohamad’s foresight and enthusiasm for the continent in the 80s and 90s. Dr Mahathir founded the Langkawi International Dialogues in 1995, which was and remains an important platform for Malaysia to engage with African nations.

We shouldn’t let these relationships lie forgotten. Instead, we need to build on this remarkable goodwill because it can provide real business opportunities for our country.

As the IMF had forecast in October 2012, Sub-Saharan Africa’s regional output is expected to expand by about 5.25% in 2012 and 2013.

The Financial Times on the other hand reported in November 2011 that the African Development Bank expected pan-African GDP in 2012 to be 5.5%.

True, poverty and political instability remain major issues but these are phenomenal rates compared to its former European colonial masters now.

Meanwhile, the Chinese presence is quite extraordinary, beginning from my fellow travellers on the late-night Kenya Airways Boeing 777 bound for Nairobi during my November trip there — many of whom were clearly from Guangzhou where the plane had originated. I still remember drifting off to sleep as announcements in Mandarin droned on in the background.

Upon arriving in Nairobi, I noticed to my surprise that most of my fellow Asian travellers had merely changed planes for other more exotic destinations – Juba, Lilongwe, Maputo, Addis Ababa, Kinshasa and Douala.

Nairobi, while strange and alien enough for me, was already old-hat for my Chinese compatriots.

Driving into town along the Mombasa Highway, I hit the morning rush-hour, enduring what can only be described of as a truly Asian traffic jam, replete with peddlers selling newspapers, magazines, household implements and toys.

We crawled along for mile after mile, negotiating the now inadequate roundabouts, overtaken in turn by the many people walking along the side of the busy thoroughfare.

After an hour or so, the city’s downtown with the distinctive cylindrical-shaped Kenyatta International Convention Centre – an icon in Nairobi where I was to stay – thankfully emerged into view.

Turning off the highway towards my hotel, I noticed a new intersection, replete with flyovers up ahead. Squinting, I could just about make out the banners announcing its upcoming launch.

Having been struck by the poor state of Nairobi’s infrastructure, I asked my driver about the new development and was told: “The Chinese built it sir. It’s the new Thika Expressway and the president will be opening it tomorrow.”

Chinese trade and investment in Africa has boomed. As Greg Levesque of the US-China Business Council wrote in the Business Insider on 27 June, the continent collectively is the third-largest recipient of Chinese outward foreign direct investment (OFDI) of nearly US$90bil (RM273bil).

Major destinations include South Africa, Angola, Nigeria and Algeria.

The key sector is of course energy, with Chinese state-owned firms like the China National Offshore Oil Company (CNOOC) hunting oil and gas blocks to meet the Asian giant’s energy hunger.

However, China is also moving into other sectors like infrastructure. The Thika Expressway for instance created 3,500 jobs for local Kenyans.

Also, in July, outgoing Chinese President Hu Jintao offered over US$20bil (RM60.8bil) in loans to African countries over the next three years.

But China’s push into Africa hasn’t come without criticism, and during the Mo Ibrahim Foundation dialogue that I attended in Dakar later on, a number of speakers touched on the imbalance in relations. Most felt uneasy about the way Africa’s natural resources were being exported to China, in return for which Africans were importing all manner of consumer goods.

As one speaker said, “The Chinese need to set up factories here in Africa to supply this market. In years to come, we will have the largest pool of young workers”.

The pan-African investment banker, Mamadou Toure felt that the continent is generally receptive. However he stresses: “China’s investments in Africa currently exceed the World Bank’s. We do need to diversify our partners.”

Indeed, there’s concern that China’s influence could alter the very social fabric of Africa. Afia Asantewaa Asare-Kyei, a Program Manager with George Soros’ Open Society Foundation in Senegal and a Ghanaian recalls a recent trip back home to her village in the Ashanti Region:

“I was surprised to see Chinese workers panning for gold alongside the locals.”

The Chinese presence is multi-faceted and deep. Indeed even in Dakar, at the newly built National Theatre (where the foundation’s dialogue took place), constructed with Chinese funding (they picked up around US$28mil (RM85mil) of the total US$32mil (RM97.3mil) cost) and know-how. Chinese workers – pleased with what they’d achieved, were very much in evidence.

The African decade is upon us. Are we in Malaysia ready to seize the opportunities that Dr Mahathir bequeathed us?

COMMENT 

By KARIM RASLAN