Citigroup Inc. (NYSE:C) Chairman Believed To Have Plotted Pandit’s Exit

Last day of Vikram Pandit at Citigroup Inc.(NYSE:C) swung from celebratory to devastating in span of minutes. Having received congratulatory e-mails about the earnings report in the morning that indicated the bank was on a more solid ground, Mr. Pandit walked into the chairman’s office on 15th October for what he considered just another meeting on his calendar.

Sadly, it was not so. Mr. Pandit was told that three news releases were ready. One said that Mr. Pandit had resigned from his post, effective immediately. Another stated that he would submit his resignation, which would be effective at the end of this year. The third release said that he has been fired without a cause. Mr. Pandit had to make a choice.

The abrupt encounter, as described by the three people briefed on the conversation, had included a terse comment by Michael E. O’Neil that said that the board has lost confidence on Pandit.

A shocked Mr. Pandit chose to resign instantly. Although Mr. Pandit and the board have publicly exemplified his exit as his decision, interviews with people, who are close to the board, describe how the chairman tricked behind the scenes for months to compel Mr. Pandit to leave and replace him with Michael L. Corbat, the chosen successor.

After becoming the chairman, Mr. O’Neil scrupulously built a case for the chief executive’s dismissal, they say, first meeting secretly with less-content board members and then involving others until Pandit had virtually no friends left.

Since Mr. Pandit was reeling from his encounter, 3 board members confronted John Havens, a longtime lieutenant and Chief Operating Officer of the bank.

It is not clear as to when exactly the board had decided on a successor. Discussions among board members had accelerated while Mr. Pandit was in Japan at the yearly meeting of the IMF and the World Bank.

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Citigroup Inc. (NYSE:C): Tension between O’Neill and Pandit might have lead to the latter’s resignation

Citigroup Inc.(NYSE:C) welcomed Michael O’Neill as their chairman some time during the earlier part of this year, and he started off his job by visiting the departments such as the trading floors. He looked at the business lines along which the bank was running, and he made evaluations on what he saw, and whom he talked to. This, however, seemed to be a matter of contention between O’Neill, and the then-CEO, Vikram S. Pandit. The lack of understanding between the chairman and the Chief Executive Officer, as well as a disagreement with each other’s methods finally lead the company to ask Pandit to give in his resignation after having served Citigroup for five crucial years.

The former marine banker and career banker, O’Neill has a very stringent approach to matters of banking, and apparently, he did not agree with Pandit’s methods. The latter was replaced by Michael L. Corbat, who has been an executive in Citigroup for a very long time. This replacement took place on Tuesday, as per the decision of board members, including O’Neill.

Sources say that there had been tension brewing between Pandit and the new chairman, and this had been going on for quite a few months. These issues had flared up over public missteps concerning the regulators and the shareholders. Also, there was the feeling that Pandit was not trying to cut costs fast enough for the satisfaction of the board members, and O’Neill. However, it is not like Mr. Pandit’s contribution to Citigroup has gone unnoticed. O’Neill said on Wednesday, during an interview, that Pandit’s contribution to the bank has been enormous. He rescued the bank during times of extreme economical crisis, and he turned the place around within five years. When he had joined, the bank had been decrepit, and he made the impossible possible by turning Citigroup into what it is today. O’Neill conceded to the fact that Pandit’s contribution to the bank has been remarkable.

However, he believes that it was time for a change, and that Pandit was not fit to deal with the present economic scenario. He also added that he had simply been doing his job of reporting what he thought should be altered or changed. 

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Citigroup Inc. (NYSE:C): CLSA’s Mayo Now Bullish After 5-Year Gloom Opinion

An analyst, who has spent the last five years telling investors to sell off Citigroup Inc. (NYSE:C)’s shares, Michael Mayo, has now reversed his standpoint after the board has replaced Vikram Pandit as CEO recently.

Mayo works in New York for CLSA. He has changed his underperform rating as Pandit’s coup indicates more proactive board, as per a note written by the analyst. The change may result in additional restructuring and more dividends for stakeholders as the company repairs its reliability with regulators.

Has Citigroup Found The Bottom and ready To Move Up? Get Special Report Here

Chairman of Citigroup, Michael O’Neil leads the board that has replaced Vikram Pandit with Michael Corbat. The move could improve poor governance. He has not asked his clients to buy shares of Citigroup based in New York since October, 2007, when the bank was down with losses amounting to billions of dollars, associated with subprime mortgages and other securities.

Mayo wrote in his note that the change in leadership at Citigroup is a symbol of enhanced governance by the board as compared to a decade of regulatory mishaps and risk management with little or no responsibility. The change of CEO certainly imparts a greater and better sense of accountability, even though a smoother transition was expected.

Citigroup directors replaced Pandit after assessing his mismanagement of operations causing negative outcomes with regulators and damaged reliability with investors.

Citigroup has gained 3.17% to $38.43 in Wednesday’s session and rose 1.60% in yesterday’s session.

Citibank used to be the largest US bank. It now stands as the third largest with $1.9 trillion in assets. It follows JP Morgan and Bank of America.

New CEO of Citi, Michael Corbet has been the CEO of Citigroup, Middle East and Africa division. He also led Citi Holdings.

Pandit is often credited for slimming the bank and removing it from the ownership of the government after the bailout and righting its balance sheet after going through billions in losses. He came under criticism for not being able to cut expenses enough last year. 

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Citigroup Inc. (NYSE:C): CLSA’s Mayo Now Turn Bullish After 5-Year Pessimism

An analyst, who has spent the last five years telling investors to sell off Citigroup Inc. (NYSE:C)’s shares, Michael Mayo, has now reversed his standpoint after the board has replaced Vikram Pandit as CEO recently.

Mayo works in New York for CLSA. He has changed his underperform rating as Pandit’s coup indicates more proactive board, as per a note written by the analyst. The change may result in additional restructuring and more dividends for stakeholders as the company repairs its reliability with regulators.

Has Citigroup Found The Bottom and ready To Move Up? Get Special Report Here

Chairman of Citigroup, Michael O’Neil leads the board that has replaced Vikram Pandit with Michael Corbat. The move could improve poor governance. He has not asked his clients to buy shares of Citigroup based in New York since October, 2007, when the bank was down with losses amounting to billions of dollars, associated with subprime mortgages and other securities.

Mayo wrote in his note that the change in leadership at Citigroup is a symbol of enhanced governance by the board as compared to a decade of regulatory mishaps and risk management with little or no responsibility. The change of CEO certainly imparts a greater and better sense of accountability, even though a smoother transition was expected.

Citigroup directors replaced Pandit after assessing his mismanagement of operations causing negative outcomes with regulators and damaged reliability with investors.

Citigroup has gained 3.17% to $38.43 in Wednesday’s session and rose 1.60% in yesterday’s session.

Citibank used to be the largest US bank. It now stands as the third largest with $1.9 trillion in assets. It follows JP Morgan and Bank of America.

New CEO of Citi, Michael Corbet has been the CEO of Citigroup, Middle East and Africa division. He also led Citi Holdings.

Pandit is often credited for slimming the bank and removing it from the ownership of the government after the bailout and righting its balance sheet after going through billions in losses. He came under criticism for not being able to cut expenses enough last year. 

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Citigroup Inc. (NYSE:C)’s CEO Resignation & International Business Machines Corp.(NYSE:IBM)’s Down After Earnings

No change in direction: Citi CEO

Citigroup Inc.(NYSE:C)’s new CEO says that there will be no change in the direction of the bank on Vikram Pandit’s stepping down.

The new CEO, Michael Corbat held a conference call with analysts and reporters in which he praised Pandit for leading the company in the financial crisis in 2008 and the recession that followed. "Today's changes do not reflect any desire to alter the strategic direction of Citi, which we believe to be the right one," he said.

Has Citigroup Found The Bottom and ready To Move Up? Get Special Report Here

Pandit’s departure on Tuesday was a surprise for the Street and led to a lot of speculation on the reasons. However Citi board chairman, Michael O’Neill said the decision to leave was Pandit’s own.

Shares of Citigroup rose another 1.50% after gaining 1.60% in yesterday’s session.

Flat earnings, fall in revenue for IBM in 3Q

International Business Machines Corp.(NYSE:IBM) declared its results for the third quarter on Tuesday. While revenue fell below expectations thanks to jittery customers and a weak Euro, the net income of the company was steady.

In a conference call with analysts, Chief Financial Officer Mark Loughridge said that the third quarter which started in July had begun with a bang but the last month of the quarter, September, turned out to be a challenging month.

On declaration of the results, shares of the company fell $9.65 or 4.60 percent to $201.39 in the opening session.

IBM made profits of $3.8 billion in the quarter which works out to $3.30 a share. In the corresponding quarter last year, the company’s net income was the same. But then, the earnings per share were 14 cents lower than this year because of greater outstanding stock.

Revenue for the quarter fell 5 percent to $24.7 billion. This missed analysts’ expectations by $700 million. Although analysts had taken into account the strengthening dollar when arriving at the estimate, they had underestimated the impact on company revenue.

The results included a onetime charge of $160 million because of a UK court’s decision that will result in higher costs for the company when paying pension to some of its retired employees.

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News Recap: International Business Machines Corp.(NYSE:IBM), Citigroup Inc.(NYSE:C)

Citigroup Inc.(NYSE:C)’s new CEO says that there will be no change in the direction of the bank on Vikram Pandit’s stepping down.

The new CEO, Michael Corbat held a conference call with analysts and reporters in which he praised Pandit for leading the company in the financial crisis in 2008 and the recession that followed. "Today's changes do not reflect any desire to alter the strategic direction of Citi, which we believe to be the right one," he said.

Has Citigroup Found The Bottom and ready To Move Up? Get Special Report Here

Pandit’s departure on Tuesday was a surprise for the Street and led to a lot of speculation on the reasons. However Citi board chairman, Michael O’Neill said the decision to leave was Pandit’s own.

Shares of Citigroup rose another 1.50% after gaining 1.60% in yesterday’s session.

International Business Machines Corp.(NYSE:IBM) declared its results for the third quarter on Tuesday. While revenue fell below expectations thanks to jittery customers and a weak Euro, the net income of the company was steady.

In a conference call with analysts, Chief Financial Officer Mark Loughridge said that the third quarter which started in July had begun with a bang but the last month of the quarter, September, turned out to be a challenging month.

On declaration of the results, shares of the company fell $9.65 or 4.60 percent to $201.39 in the opening session.

IBM made profits of $3.8 billion in the quarter which works out to $3.30 a share. In the corresponding quarter last year, the company’s net income was the same. But then, the earnings per share were 14 cents lower than this year because of greater outstanding stock.

Revenue for the quarter fell 5 percent to $24.7 billion. This missed analysts’ expectations by $700 million. Although analysts had taken into account the strengthening dollar when arriving at the estimate, they had underestimated the impact on company revenue.

The results included a onetime charge of $160 million because of a UK court’s decision that will result in higher costs for the company when paying pension to some of its retired employees.

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Early Movers: Citigroup Inc.(NYSE:C) & International Business Machines Corp.(NYSE:IBM)

No change in direction: Citi CEO

Citigroup Inc.(NYSE:C)’s new CEO says that there will be no change in the direction of the bank on Vikram Pandit’s stepping down.

The new CEO, Michael Corbat held a conference call with analysts and reporters in which he praised Pandit for leading the company in the financial crisis in 2008 and the recession that followed. "Today's changes do not reflect any desire to alter the strategic direction of Citi, which we believe to be the right one," he said.

Has Citigroup Found The Bottom and ready To Move Up? Get Special Report Here

Pandit’s departure on Tuesday was a surprise for the Street and led to a lot of speculation on the reasons. However Citi board chairman, Michael O’Neill said the decision to leave was Pandit’s own.

Shares of Citigroup rose another 1.50% after gaining 1.60% in yesterday’s session.

Flat earnings, fall in revenue for IBM in 3Q

International Business Machines Corp.(NYSE:IBM) declared its results for the third quarter on Tuesday. While revenue fell below expectations thanks to jittery customers and a weak Euro, the net income of the company was steady.

In a conference call with analysts, Chief Financial Officer Mark Loughridge said that the third quarter which started in July had begun with a bang but the last month of the quarter, September, turned out to be a challenging month.

On declaration of the results, shares of the company fell $9.65 or 4.60 percent to $201.39 in the opening session.

IBM made profits of $3.8 billion in the quarter which works out to $3.30 a share. In the corresponding quarter last year, the company’s net income was the same. But then, the earnings per share were 14 cents lower than this year because of greater outstanding stock.

Revenue for the quarter fell 5 percent to $24.7 billion. This missed analysts’ expectations by $700 million. Although analysts had taken into account the strengthening dollar when arriving at the estimate, they had underestimated the impact on company revenue.

The results included a onetime charge of $160 million because of a UK court’s decision that will result in higher costs for the company when paying pension to some of its retired employees.

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Citigroup Inc. (NYSE:C): CEO Vikram Pandit steps down after five years

Friction between Vikram Pandit and the board of directors in Citigroup Inc.(NYSE:C) lead to Pandit resigning from his post. However, he was not alone, since along with him, the COO, John Havens also quite the job. The tension between the board as well as Pandit was over the ideology followed regarding the performance of the bank, as well as the strategy behind it. Both the men, now 55, resigned from their posts in the New York- based company. This happened on Tuesday, which also came as a shock to most of the employees at Citigroup. Mike Corbat is to take Pandit’s place as the CEO of the third largest bank in the United States of America.

The shock was relevant even for the senior officials in the bank because Pandit had not hinted at a desire to leave the bank. He had plans for the bank, and he was intending to implement them up until the time that the focus shifted to the bank’s international operations.

Vikram Pandit had entered the bank at a time of grave financial crisis, and he had rebuilt the structure of the bank to yield profits very soon. The global franchise had been made stronger under him, as was the focus on the business. Pandit had also lead the company to recapitalize. It was under Pandit that Citigroup was able to pay back the loan it had taken from the government. This was done in 2008 and 2009. Under his leadership, the bank also managed to sell off substantial amounts of money in unwanted assets, which ran to millions. The company, under his guidance, has come to earn about $11 Billion dollars after so many years.

However, this is not to say that his system was flawless. Shareholders revolted over the pay of executives, the Federal Reserve rejected the idea of buying back some of the stocks, and other such issues have cropped up. However, the fact remains that he had still managed to rescue the bank when it was sinking. After he left, the shares rose by thirty percent to $36.96 on Tuesday, during midday trading. 

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