Citigroup shuffles management, Pandit remains
Filed under: Company News
Citigroup (C) announced today that is was changing several top management roles in the company, which CEO Vikram Pandit described as moves that will "further help in positioning our company for the future."
CFO Ned Kelly will step down and transition to a role with "broader responsibilities for strategy and M&A," which likely means he will be responsible for selling parts of the company to simplify operations. Kelly became the CFO in March 2009, and will be replaced by John Gerspach, Citi's controller and Chief Accounting Officer. Gary Crittenden, who was Citi's CFO for two years before becoming Chairman of subsidiary Citi Holdings, will leave the company to spend more time with family. Notably absent from the list was Pandit, who has been the target of much criticism for his management of Citigroup.
The changes come one week before Citigroup is scheduled to report their second quarter earnings results. Analysts on average expect Citi to lose $0.26 per share, compared to $0.54 cents in the same quarter last year. All estimates anticipate a loss, a sign of how Citi has struggled to attract believers that it can turn its operations around.
In a June 16 note obtained by DailyFinance, Morgan Stanley (MS) reported that in their meeting with then-CFO Ned Kelly, he emphasized the firm's objective is to quickly wind down Citi Holdings. That segment of Citi had more than $800 billion in assets, and includes brokerage, asset management, and consumer finance businesses. Morgan Stanley had an "Equal-weight" rating and $6 price target on Citigroup stock, part of the large bank industry rated as "Attractive." Citigroup shares currently trade under $3.
Citigroup has received the largest amount of government assistance of any bank; through the TARP program, the Treasury Department has invested $45 billion in return for preferred stock, and received another $27 billion in preferred stock in exchange for guaranteeing losses on more than $300 billion in assets. The U.S. government later converted its preferred stock into common shares, becoming the largest shareholder in Citigroup, and making the bank one of the best-capitalized in the world according to regulatory ratios.
James Cullen also edits and writes at CollegeAnalysts.com.
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Reader Comments (Page 1 of 1)
7-09-2009 @ 7:15PM
sam said...
The captain should go down with the ship. This clown was the root of the Citi problems, he should be gone, not some underlings thrown to the dogs .
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7-10-2009 @ 11:31AM
Don said...
Actually the person responsible for the debacle of Citigroup is Sandy Weill, who took Citi in so many directions over the years. When I worked there before the entire insurance division was "job discontinued" (2006-2008) the stock went from $57 a share to $21 under his watch. He should have been fired years before. Pandit was an outsider who was brought in to try and save what was left.
7-09-2009 @ 8:09PM
Dave said...
I assume the second stimulus the feds are trying to throw on us will go to shore up the banks and ignor the real problem again. Our president listens to leaders from other countries before he listens to us. The man is dangerous and his agenda will kill this nation. Taxing companies into extintion or making them move overseas. The money given to banks if it was directed at the housing and job market like we were told the recession would be winding down. The only ones who benifitted from the TARP bill were the ones who caused the mess. And now they are talking giving more! We have a man who never worked in his life running car companies and banks. This is not a very good time for America and if congress allows this everyone of them should be thrown to the street never to work in govenment again. Cap and trade is the biggest farse and tax in history. It is not working in Europe and it will not work here.
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7-10-2009 @ 4:32AM
Tom said...
Now now. Try not to complain folks. It's what you get for demanding NO bank nationalization. You get tainted leadership who keep their jobs. Had we wisely taken 51% or greater control of these too big to fail financial money pits, we'd have had absolute right to show people like Panda the door. Instead, they remain to, in lock step, secure even more damage by handing down yet more consumer fees and charges- while strangulating the home market by keeping foreclosure prices high. Americans are stupid. Plain and simple.
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