Friday, April 24, 2009

Citigroup CEO Vikram Pandit May Lose His Job

. Friday, April 24, 2009

By stockOzone team

Citigroup Inc. (NYSE: C) chief executive Vikram Pandit may be removed from his job by US regulators following the completion of stress tests, media reports suggested on Friday. A couple of days back, The Financial Times reported that senior officials at the Federal Deposit Insurance Corporation have privately discussed who might replace Mr. Pandit as the chief executive of Citigroup if the bank required more government aid.

Among potential successors being discussed by F.D.I.C. officials were Ned Kelly, Citigroup’s chief financial officer, the newspaper said. However, Ned Kelly told the paper in an interview: "Replacing (Pandit) would be dramatically destabilizing both for Citi and the system."

Meanwhile a Citigroup sokeswoman said "Our recent quarterly results reveal the underlying strength of the franchise and Vikram Pandit's strategy at work to restore Citi to profitability."

Speaking at the company's annual shareholder meeting on Tuesday, Vikram Pandit vowed to to stay on as Citigroup’s chief executive and repay $45bn in government aid with interest.Pandit also told shareholders that “our own people have paid a dear and heavy price” and that he fully recognizes the loss in value after Citigroup’s stock-price slide. “We’re positioned to win,” Pandit said. “I intend to see this through because there is no more important place to be than Citi.

Last week, the company reported that it swung to $1.6 billion first quarter profit from a $5.1 billion loss or 34 cents a year earlier.On a per-share basis, the bank reported an 18-cent loss because of costs related to preferred dividends. The average estimate of 13 analysts surveyed by Bloomberg was a loss of 32 cents.

Results of the stress test conducted by government officials, the Federal Reserve will be released on May 4 publicly.

Disclosure: Author does not own any of the stocks discussed here.

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