We've noted that Citigroup faces a vexing situation when it comes to Phibro, whose head honcho, Andrew Hall, is owed a $100 million bonus for 2008. Some have suggested that Citigroup ought to spin off a sizable portion to Hall. But Breakingviews goes one step farther. It argues that Citigroup really has no choice but to sell the entire unit, to Hall or someone else.

The energy trading unit has performed well under Citigroup. Obviously, 2008 was a spectacular year. "But Phibro isn't just another trading or hedge fund business like those Citi and its rivals either did or do still run. It's largely autonomous and appears to rely heavily on one individual--Mr. Hall." That's reason for worry right there. In addition, at some point, those trading profits could easily move the other way. Perhaps the new Citigroup, effectively a government controlled bank, doesn't need this sort of trading risk weighing on its recovery efforts. 

For more:
- here's the article

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