SOURCE: IR magazine

March 26, 2008 11:57 ET

IR magazine Survey Finds Citigroup Worst, JPMorgan Chase Best, Communicators During Subprime Crisis

Bear Stearns Viewed With Ambivalence in the Year-End Survey

NEW YORK, NY--(Marketwire - March 26, 2008) - Citigroup was perceived by securities analysts as the worst of the leading financial sector companies at communicating the impact of the subprime crisis on its operations, according to research conducted by IR magazine between December and January. It was followed by Merrill Lynch, E*Trade Financial and Countrywide Financial and Bear Stearns.

The greatest number of analysts in the survey identified Citigroup, which suffered some of the biggest losses, as the least effective in disclosing its exposure regardless of whether the news was good or bad. In anecdotal comments, analysts described Citigroup's reporting as 'piecemeal' and 'opaque,' leading to confusion and a cautious watch on the company.

Merrill Lynch, whose true losses sharply exceeded its first estimates, took 16.9 percent of the 'worst' votes. 'Analysts told us the firm was too slow in getting an accurate picture of its exposure out to the market,' says Neil Stewart, executive editor of IR magazine. 'There was a feeling that they didn't know the full extent or were attempting to soft-pedal it.'

JPMorgan Chase, by contrast, was noted for getting out in front of the issue early, being straightforward and having a strong CEO in Jamie Dimon leading the way. The bank was rated the best at subprime communications, with 13 percent of analysts saying it presented the clearest picture of its problem.

AIG, which ranked second best, was also given good marks, in its case for a special six-hour meeting, repeated investor calls and detailed tutorials outlining its subprime exposure. 'AIG was an open book, which is what you are really aiming for in an investor relations program,' Stewart says.

Bear Stearns ranked near the top of both the best and the worst lists. 'Some analysts praised the company for being the first to recognize the problem, but others faulted it for not going beyond very basic disclosure,' Stewart says.

The research on subprime communications was part of the large investor perception study behind the annual IR Magazine US Awards, which will be held in New York on March 27. Each year, the results serve as a benchmark for best practice in IR by singling out notable performance by individuals and companies.

Respondents were asked to rate the 17 financial sector companies, excluding GE, listed on the Wall Street Journal's 'subpar earnings' scorecard which catalogs companies that have reported the impact of their subprime exposure. The independent survey drew responses from 1,427 buy-side analysts, sell-side analysts and portfolio managers in databases supplied by Thomson Financial and Ipreo. It was conducted between November 28, 2007 and January 11, 2008.

Percent of analysts rating company the worst:
Citigroup               23%
Merrill Lynch           16.9%
E*Trade Financial       13.5%
Countrywide             12.5%
Bear Stearns            7.6%

Percent of analysts rating company the best:
JPMorgan Chase          13%
AIG                     11.7%
Bank of America         8.4%
Wells Fargo             8.4%
Bear Stearns            7.3%

The full results are published in Investor Perception Study, US 2008: Winning companies, winning IR strategies. To order a US Investor Perception Study, please contact Megan Bruce at 212 430 6861.

About the Investor Perception Study

The IR magazine investor perception studies together make up the world's largest survey of this kind, canvassing more than 5,000 analysts and investors in more than 14 countries and regions. Survey respondents nominate companies in specific categories and offer their opinions on IR-related topics and trends. For more information on the study, please contact Kate Giblin at the number listed at the bottom of this release.

About Cross Border Ltd and IR magazine

Cross Border Ltd is the publisher in New York and London of IR magazine, the only global publication focused on the interface between companies and their investors. IR magazine hosts annual awards ceremonies in the US, the UK, continental Europe, Canada, the Nordic region, Asia, Brazil and Ireland, with a combined annual attendance of nearly 8,000 investor relations professionals. Visit www.thecrossbordergroup.com for more information.