On Tuesday, the board of directors of Citigroup announced that CEO Vikram Pandit resigned effective immediately. The board said Michael Corbat the Middle Eastern and European division chief at the bank would replace Pandit.
Also resigning was the president of the bank and a long time associate of Pandit, John Havens. The move was very surprising by Pandit and comes only a day after stronger than expected earnings for the third quarter had been reported.
Excluding numerous one time charges, which included a loss that was tied to the Smith Barney brokerage shedding, Citigroup’s earnings were $1.06 per share or $3.27 billion. That was higher than the average of the analysts’ estimates by 96 cents per share.
Pandit sent a memo to his employees that said there was not anything better than the third quarter earnings that demonstrate everyone at the company has helped turn it around.
The company has been lining up a successor to Pandit for the last year said many people close to the situation. One candidate was Jamie Forese, the bank’s chief of securities and banking. However, Pandit had expressed in the bank his commitment to remain on as the CEO until the bank was on firm ground.
During the tenure of Pandit, which started December 2007, the bank went through the market upheaval of the financial crisis and had to have several rescue lines tossed to it by the government. However, it recovered slowly thanks to shedding large portions of different businesses. Among those it shed was Smith Barney, that Morgan Stanley is absorbing.