The chief executive officer (CEO) of Citigroup, Vikram Pandit, has surprised Wall Street and the financial services sector by resigning with immediate effect.
The announcement, which came late Tuesday after the markets closed and Citigroup had reported an 88% drop in quarterly profits to US$468m, was quickly followed by news of his successor. Michael Corbat, who was previously the bank’s chief for Europe, Middle East and Africa (EMEA) is set to take over.
Pandit was appointed CEO in December 2007 and his tenure covered the banking crisis in 2008, which almost did for the bank that had to accept a US government bailout to survive. In a statement, Citigroup praised their now ex-CEO for his “leadership, integrity and resilience in guiding Citi through the crisis”. He cut 23,000 jobs in 2008 and 52,000 jobs over the next year, as part of the inevitable slimming down of the bank post-crash.
The heavy fall in quarterly profits was expected and can mainly be put down to the US$4.7bn charge Citigroup took in reducing the value of its stake in the Morgan Stanley Smith Barney joint venture that it is selling, but the CEO’s departure was not expected.
John Havens, Citigroup’s president and chief operating officer (COO), has also resigned, prompting wholesale change at the bank. Citigroup said that Havens had already been planning to retire at the end of the year, but that in the light of Pandit’s departure he had decided to leave at the same time. Citi chairman, Michael O’Neill, claimed that the departures were not due to any strategic, regulatory or operating issue.
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