Citi’s Pandit quits after board row

Tim Wallace
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VIKRAM Pandit stood down as Citigroup chief executive yesterday following a boardroom row, shocking investors and temporarily knocking the bank’s share price.

Pandit had been at the top of the US bank for more than five years, steering it through the financial crisis and implementing a major turnaround programme.

Yesterday he resigned with immediate effect, to be replaced by Michael Corbat, a career staffer at the bank and chief of Citi’s Europe, Middle East and Africa business.

President and chief operating officer John Havens, long seen as a close adviser to Pandit, also stood down yesterday, moving before his initial plan to leave at the end of this year. It is thought boardroom tensions have been simmering since new chairman Michael O’Neill took the role in April.

Analysts at Bank of America said the pair clashed as O’Neill focused on operational management while Pandit’s approach was more strategic – a row that is believed to have contributed to his departure. O’Neill admitted in a last night that the company had been planning for Pandit’s departure for years. “We have been engaged in the process for two years, we are very well positioned,” he told analysts in a conference call, denying that Pandit has resigned over pay, and saying he was “proud of what we have done”.

A source at the bank insisted Pandit parted on good terms. “Even if there was a row, the board is grateful for the good work Vikram has done in the last five years,” the source said.

Pandit last night insisted the decision to leave was his.

“I have been thinking about this for a long time. It was my decision. I made it talking to Mr O’Neill, and we did it understanding that the company was ready,” he told Bloomberg TV.

O’Neill praised the outgoing chief executive’s work in turning the bank around, and said that he remains confident in the firm’s future.

New chief Corbat sent an email to staff, explaining he will “take the next several weeks to immerse myself in the businesses and review reporting structures” before making changes.

However he did make it clear that there will be a shake-up.

“Regulatory, legislative and economic changes around the world present headwinds as we redefine our relationships with all of our stakeholders,” he wrote. “To thrive, we must be vigilant about how we allocate our resources.”

Corbat added last night that he would focus on the core performance of Citi, but would “not alter the strategic direction of the firm”.

Shares initially dropped 1.5 per cent on the resignation before rebounding to end the day up 1.17 per cent.

Ratings agency Moody’s cut the bank late last night to a negative outlook.