Vikram Pandit, the chief executive of Citigroup, has stepped down from his role at the helm of affairs at the financial services giant and also as the member of the board, effective immediately. His next moves were not immediately disclosed though Citigroup announced its board has unanimously elected Michael Corbat as CEO and a director of the board. Corbat previously served as Citigroup’s CEO of Europe, Middle East and Africa.
In a parallel move, Citigroup’s President and COO, John P. Havens, who also served as CEO of Citi’s Institutional Clients Group, also resigned. Havens, considered close to Pandit, was said to be planning retirement from Citi at year-end, but decided to quit immediately post Pandit’s move.
Pandit, one of the few global corporate executives of Indian origin who scaled to the top job at a financial services firm, is considered a big survivor. More than once there were rumours of Pandit stepping down as the banking giant faced major stress as a fallout of the global financial crises.
He steered the banking group even as the US government came in with a multi-billion dollar bailout cash infusion, picking large chunk of shares of the company which also made many investors wary over the future of Citigroup as an independent financial services firm. The US government eventually sold the stake as the storm passed, not before making a profit on its investment.
Pandit said: “Thanks to the dedication and sacrifice of people across Citigroup, we have emerged from the financial crisis as a strong institution. Citigroup is well-positioned for continued profitability and growth, having refocused the franchise on the basics of banking. Given the progress we have made in the last few years, I have concluded that now is the right time for someone else to take the helm at Citigroup.”
Pandit, who moved to the US in his teens after his schooling from Dadar in Mumbai, got his undergraduate degree from Columbia University and went on complete his electrical engineering and thereafter MBA from Columbia Business School. He was a long timer with Morgan Stanley before joining hands with John Havens to float hedge fund Old Lane. Old Lane was acquired by Citi in 2007 and Pandit was appointed head of Citigroup’s alternative investments unit. At the fag end of the same year Pandit was elevated as the chief executive of Citigroup. This was just a month before stock markets crashed globally under the weight of sub prime mess.
Michael E. O’Neill, chairman of the Citigroup board 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.”
Talking about Mike Corbat, O’Neil added: “From his nearly three decades at the company he brings deep and varied operating experience across a broad spectrum of the financial services industry. He has managed numerous institutional businesses, including sales and trading, capital markets, corporate and commercial banking, and such consumer businesses as wealth management, mortgages and credit cards. During the financial crisis, he successfully led the divestiture of more than 40 businesses, helping to strengthen the company’s balance sheet substantially. In this role, he also restructured and rebuilt a number of the company’s consumer-facing businesses, including the mortgage and credit card businesses.”
“Mike is a proven, hands-on leader who is known for his focus on enhancing productivity, holding people accountable and practicing sound risk management. He has consistently delivered impressive bottom-line results at many of our major global business units and has forged a strong track record of improving efficiency and mitigating risk while also optimizing the allocation of the Company’s capital,” O’Neill concluded.
Corbat said in a statement: “The fundamentals we have in place today are solid, and we are on the right path. In this dynamic market environment, however, we must efficiently allocate our resources and offer the products with the highest potential in the most productive markets. Citi’s businesses, footprint and talent are unmatched, and we will be relentless in our drive toward operating excellence and risk management.”
He added: “I also wish to extend my personal appreciation to Vikram for all he has achieved. Without his leadership, Citigroup would not be so well positioned globally to tackle the challenges and opportunities ahead of us.”
Pandit, who completed nearly five years as CEO of Citigroup, spent longer time as head of a large global bank compared to other bankers of Indian origin who scaled up the corporate ladder in the West. Earlier Aman Mehta had served as the CEO of HSBC and Rana Talwar was the CEO of Standard Chartered Bank, albeit for relatively shorter time period.