In a shock that rocked Wall Street this morning, Citigroup's Board of Directors announced that Vikram Pandit has stepped down as the Company’s Chief Executive Officer and as a member of the Board, effective immediately.
Pandit's close friend and Citigroup's President and Chief Operating Officer John Havens also resigned.
Replacing Pandit as CEO, by unanimous board vote, is Michael Corbat, a Citigroup lifer who joined the bank straight out of Harvard in 1983. Most recently, Corbat ran Citi's Europe, Middle East and Africa business. He has been based in London since 2005 and was a senior manager at Citigroup’s global markets and equities business.
Now the street is wondering who else will leave. Corbat sent a memo to employees today that he'll spend the next several weeks scrutinizing the bank’s management structure and businesses before making changes, according to Bloomberg. “These assessments will result in some changes,” Corbat wrote, “I will make sure to communicate these changes with you as decisions are made so that you are informed and updated.”
Our U.K. Editor Sarah Butcher writes that "Corbat’s ascension as CEO of the entire firm can, surely, be a good thing for Citi’s investment bankers in London."
In yesterday’s earnings call, Citigroup revealed that its EMEA investment banking operations were by far its largest – accounting 33% of its investment banking revenues globally.
Butcher asks, "was Corbat chosen partly because of his experience at running such an important part of the business at such a difficult time for Europe?"
"I could not be leaving the Company in better hands," said Pandit. "Mike is the right person to tackle the difficult challenges ahead, with a 29-year record of achievement and leadership at this Company."
In a statement released today Pandit also said he has concluded that now is the right time for someone else to take the helm at Citigroup.
“Thanks to the dedication and sacrifice of people across Citigroup, we have emerged from the financial crisis as a strong institution," said Pandit. "Citigroup is well-positioned for continued profitability and growth, having refocused the franchise on the basics of banking."
Michael E. O’Neill, Chairman of the Citigroup Board of Directors, said: “We respect Vikram’s decision. Since his appointment at the start of the financial crisis until the present time, Vikram has restructured and recapitalized the Company, strengthened our global franchise and re-focused the business. The Board and I are grateful to Vikram for his leadership, integrity and resilience in guiding Citi through the crisis and positioning it well for the future. We wish him all the best with the next stage in his career."
This story is developing and we will continue update with more information as it becomes available.