Posted on 10/16/2012 6:58:56 AM PDT by SeekAndFind
Citigroup‘s board said on Tuesday that Vikram S. Pandit had stepped down as chief executive, effective immediately, and will be succceeded by the head of the bank’s European and Middle Eastern division, Michael L. Corbat.
John P. Havens, the bank’s president and a longtime associate of Mr. Pandit’s, has also resigned.
The surprising move by Mr. Pandit comes just one day after the firm reported stronger-than-expected third-quarter earnings. Excluding a number of onetime charges — including a big loss tied to the continued shedding of the Smith Barney brokerage — Citigroup earned $3.27 billion, or $1.06 a share. That bested analyst estimates of 96 cents a share.
There is nothing better than our third quarter earnings announcement to demonstrate definitively that we have turned this company around,” Mr. Pandit said in a memo to employees.
Shares of Citigroup slipped in the opening of trading on Tuesday.
Discussions to line up a ready successor to Mr. Pandit have been in the works at Citi over the past year, according to several people familiar with the matter. One leading candidate to succeed Mr. Pandit had been Jamie Forese, the head of securities and banking. Inside the bank, however, Mr. Pandit had expressed his commitment to stay at the helm of the bank until it was on firmer footing.
Under Mr. Pandit’s tenure, which began in December 2007, Citi struggled through enormous market upheaval and needed several rescue lines from the government. But it has slowly recovered, in large by shedding big portions of its businesses. Among them is Smith Barney, the brokerage operation that is being absorbed by Morgan Stanley.
(Excerpt) Read more at dealbook.nytimes.com ...
I suspect there is a pretty good story to come out here about Pandit the bandit.
The talk in Wall Street is that Pandit came from a Hedge Fund and investment banking background.
Citi on the other hand wants to return to its core business of Traditional Banking instead of focusing on the more esoteric and hard to control businesses of trading financial instruments and others.
Hence, they’re looking for somebody with a strong background in Traditional banking -— Commercial and Business Loans, Mortgages, etc.
In other news, Both Fox Business Network’s senior corerspondent Charlie Gasparino and CNBC’s “Mad Money” host Jim Cramer report that Vikram Pandit was forced out as CEO of Citigroup.
Gasparino Tweeted that the board thought the Morgan Stanley Smith Barney deal was the “last straw.”
If you’re not familiar with the Morgan Stanley Smith Barney deal, last month Citigroup and Morgan Stanley agreed to value the retail brokerage joint venture at $13.5 billion, Dealbook’s Michael J. De La Merced reported.
With that valuation, Morgan Stanley won the pricing battle against Citi and was able to start purchasing Citi’s stake in Stanley Smith Barney closer to its valuation estimate.
Citi had believed that Morgan Stanley Smith Barney was worth $22 billion, according to Bloomberg News.
Looks like this is the earthquake before the tsunami.
You know what about to hit the electric cooling device?
” The talk in Wall Street is that Pandit came from a Hedge Fund and investment banking background.”
And back he will go.
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