by Kit R. Roane, contributor
Citigroup's revelation last Friday that it finally found buyers for its troubled student loan business was good news to investors betting on a turnaround. But finding a home for the roughly $480 billion in remaining troubled assets on the bank's balance sheet may be no easy task.
"The low-hanging fruit has obviously been dealt with," notes Harlan Platt, a finance professor at Northeastern University, adding that many of the assets held in Citi Holdings, otherwise known as "the bad bank" have been marketed on and off for about a year "with virtually no bidders."
Last week's deal removes about $40 billion of student loans from Citigroup's troubled asset unit and shifts the former financial bazaar a bit closer toward CEO Vikram Pandit's dream of a slimmed-down behemoth that does banking, but little else. It also signals a welcome relaxation in the financial markets, which have seen a notable increase in mergers and acquisitions, and a general willingness to take on more risk.
It's encouraging that Citigroup (C) made progress with its student loans. For a long time, Citi couldn't even give them away. But time -- and extraordinarily low interest rates -- apparently cures all ills. More
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