Pandit Stakes Citi's Future on Emerging Markets

Vikram S. Pandit steered Citigroup (C) through the financial crisis with the help of a $45 billion taxpayer-funded bailout. Now he's embarked on a perilous course, staking the bank's future on emerging markets. As rising inflation threatens growth in developing countries, Pandit's plan to become the world's "largest emerging-markets financial services company" makes Citigroup more vulnerable to decline in those economies than any other U.S. bank, says David Konrad, an analyst at Keefe Bruyette & Woods (KBW) in New York.

The bank's shares have fallen 13 percent since touching a 16-month high on Jan. 14, in part because of the "potential slowdown in emerging economies," Richard Bove of Rochedale Securities in Lutz, Fla., wrote in a Mar. 2 analyst's note.