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New York: Citigroup Inc Chief Executive Vikram Pandit resigned abruptly yesterday, 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 pre-market 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 labours 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.
The one-two punch of the results and then Pandit’s exit point to what analysts say has been a years-long unsettled atmosphere around the bank.
“What Pandit and Havens did was increase the uncertainty around Citi,” said Matt McCormick, banking analyst and portfolio manager at Bahl & Gaynor in Cincinnati, Ohio.