Wednesday, 23 July 2014
Last updated 4 hours ago
Oct 16 2012 | 10:24am ET
Vikram Pandit has stepped down as chief executive of Citigroup.
Pandit will be succeeded by Michael L. Corbat, the head of the bank's European and Middle Eastern division.
Bank president (and longtime Pandit associate) John P. Havens has also resigned, according to the Citi board.
Pandit's resignation, which is effective immediately, came just after the bank reported stronger than expected Q3 earnings of $3.27 billion (excluding several one-time charges including a loss tied to the sale of its stake in the Smith Barney brokerage to Morgan Stanley).
In a statement, Pandit said: “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. I could not be leaving the company in better hands. Mike is the right person to tackle the difficult challenges ahead, with a 29-year record of achievement and leadership at this company. I will truly miss the wonderful people throughout this organization. But I know that together with Mike they will continue to build on the progress we have made.”
The New York Times, citing “several people familiar with the matter,” reports that discussions about a Pandit successor have been underway for the past year.
Pandit, who emigrated to the United States from his native India, worked at Morgan Stanley before establishing Old Lane Partners, a hedge fund and private equity firm acquired by Citigroup for $800 million in July 2007.
In December of that year he took over the top job at Citigroup and saw the bank through a tumultuous period that included a government bailout. The group has since recovered, largely by divesting itself of parts of its business. By the end of 2010, the government had cashed out its remaining investment in the firm at a $12 billion profit.
Pandit's resignation follows the March rejection, by the Federal Reserve, of the bank's capital plans after a stress test and last month's sale of a stake in the brokerage operated by Morgan Stanley which resulted in a $4.7 billion write down.
His successor in the CEO's seat, Corbat, promised employees in an internal memo Tuesday that he would immerse himself “in the businesses and review reporting structures,” reports the Times. The result of that immersion, Corbat said, will be “some changes, and I will make sure to communicate these changes with you as decisions are made so that you are informed and updated.”
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