Saturday 21 April 2018

Citigroup’s chief executive Vikram Pandit resigns abruptly

David Henry

CITIGROUP Chief Executive Vikram Pandit resigned abruptly today, effective immediately, a shock change at the top of the bank just one day after a surprisingly strong quarterly earnings report.

A statement from Chairman Michael O'Neill said Michael Corbat, previously chief executive for Europe, Middle East and Africa, would succeed Pandit as CEO and as a board member.

Within minutes of the bank's announcement, Pandit's name was gone from Citigroup's website.

Chief Operating Officer John Havens, a long-time associate of Pandit, also resigned.

Citigroup's stock tumbled 2.5 percent in premarket trading following news of Pandit's departure, but later the shares were up 20 cents to $36.86 in early trading on the New York Stock Exchange.

Investors questioned why Pandit would leave now after keeping the bank afloat during the financial crisis and getting it back on a firmer footing.

"I would have expected he wanted to stay around and see some of the fruits of his labors there," said Peter Jankovskis, co-chief investment officer of Oakbrook Investments LLC in Lisle, Illinois.

Pandit's resignation comes after a series of high-profile defeats this year. In March the Federal Reserve rejected the bank's capital plans after a stress test; Pandit had led analysts and investors to believe the dividend-raising plans would be approved.

Last month, Pandit agreed to a low sale price for his bank's stake in the brokerage operated by Morgan Stanley. Citigroup had to take a $4.7bn charge in the third quarter to write down the value of that stake.

Citigroup shares rose sharply on Monday after the bank reported third-quarter results that were much better than analysts expected.

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