How sudden is today's departure of Citigroup boss Vikram Pandit from his CEO job and board seat? The move follows a stronger-than-expected third-quarter profit report, and rumors of a boardroom revolt, notes Jeffrey Harte, veteran bank-watcher at Sandler O'Neill & Co. Pandit will be replaced by a 30-year Citi veteran, Michael Corbat.
Pandit took over from Charles Prince in 2007 as losses spiraled at what was formerly the largest U.S. bank. Pandit's hiring was unusual: the firm he started with a group of ex Morgan Stanley colleagues, including a commodities desk based in Radnor, were purchased by Citi at a price far above their market value in 2007. At the time, then-Citigroup adviser Robert Rubin denied Pandit was a potential CEO. Pandit got the job several months later on Prince's departure.
"We liked Mr. Pandit and the strategic direction he had Citi pointed in, and do not expect significant strategic changes," Harte wrote in a report to clients. "Things we like about Mr. Corbat include his diverse business operating experience (including consumer and commercial banking), experience running emerging market specific businesses at Citi (former head of emerging market debt), and strong communication skills (increasingly important for CEOs today)."
Maybe it's a good thing that Citi, for the first time since its founding in the late 1990s, will be run by a veteran banker -- a guy who made loans and bossed lenders, underwriters and collectors, in the U.S. and abroad -- rather than a dealmaker from the investment banking business (founder Sandy Weill), a lawyer (Prince) or a hedge fund guy (Pandit).