Citigroup's boss Pandit resigns

Written By Unknown on Selasa, 16 Oktober 2012 | 20.24

16 October 2012 Last updated at 09:05 ET

The chief executive of Citigroup, Vikram Pandit, has resigned with immediate effect.

Mr Pandit is being replaced by Michael Corbat, who was previously the bank's chief for Europe, the Middle East and Africa.

In a statement, Citigroup praised Mr Pandit for his "leadership, integrity and resilience in guiding Citi through the crisis".

Mr Pandit had been appointed chief executive in December 2007.

News of his departure comes a day after the bank reported an 88% drop in quarterly profits to $468m (£291m).

However, the drop was mainly due to a $4.7bn charge from reducing the value of its stake in the Morgan Stanley Smith Barney joint venture that it is selling, and the overall profit was better than expected.

Mr Corbat said: "The fundamentals we have in place today are solid, and we are on the right path."

Citigroup's president and chief operating officer, John Havens, has also resigned.

The bank said that Mr Havens had already been planning to retire at the end of the year, but in the light of Mr Pandit's departure had decided to leave at the same time.

'Right time'

"Citigroup is well-positioned for continued profitability and growth, having refocused the franchise on the basics of banking," said Mr Pandit.

"Given the progress we have made in the last few years, I have concluded that now is the right time for someone else to take the helm at Citigroup."

The board said that it respected his decision.

In August this year, Citigroup paid $590m to shareholders who had accused the bank of hiding the scale of its exposure to sub-prime mortgages.

Citigroup denied the allegation but said it wanted to avoid further legal costs. The payout is one of the biggest settlements connected to the global financial crisis which began four years ago.

Mr Pandit is well known on Wall Street for his performance at Morgan Stanley, where he worked for two decades until 2005 and became president of that bank's investment banking unit.

He left to set up a hedge fund call Old Lane, which was bought by Citigroup in 2007 for $800m and Mr Pandit moved across to head up the firm's alternative investments, later taking on the bank's whole capital markets unit.

The bank suffered during the financial crisis in 2008, as its share price dropped by more than 70% and it was hit by huge losses of more than $20bn, hurt by bad debts and write-downs on assets hit by the turmoil in credit markets.


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