Veteran Banker To Head Citigroup

Chairman, CEO Roles Separated

NEW YORK, Dec. 11 -- Citigroup on Tuesday named Vikram Pandit, a Wall Street veteran versed in arcane areas of the credit market, as its chief executive.

The selection ends a five-week hunt for a successor to Charles O. Prince, who stepped down as chief executive and chairman in early November after Citigroup acknowledged that it could lose as much as $11 billion on mortgage-related investments in the fourth quarter.

Winfried Bischoff, who had been acting chief executive of the largest U.S. financial-services company since Prince left, was named chairman. Citigroup became the first major Wall Street firm to separate the roles of chief executive and chairman.

Robert E. Rubin, the former Treasury secretary who stepped in as chairman when Prince left, will return to his role as chairman of the Citigroup board's executive committee.

In conference calls with analysts and the media, Pandit, 50, said he planned to focus on increasing productivity and making sure that capital is allocated properly at the company. Citigroup has about $2.4 trillion in assets and 300,000 employees.

"I will undertake an objective and dispassionate review of all the businesses individually and in aggregate to make sure that we are properly positioned for the future," Pandit said. Simplifying Citigroup's structure would be a priority, he said.

Pandit faces a daunting task, as analysts continue to voice concerns about write-downs, dividends and undercapitalization. With the company's stock price down about 40 percent this year, some shareholders have said Citigroup should be broken up.

A criticism of Pandit is that he lacks experience in consumer banking, a critical part of Citigroup's business.

"They clearly got a professional who can address the current crisis," said Roger Ehrenberg, an entrepreneur who worked 18 years at Citigroup and Deutsche Bank in investment banking and derivatives departments. "But is he the right person to address the broader growth issues that they have? That's a different question."

Ehrenberg said the separation of chief executive and chairman made sense, given Pandit's shortcomings.

"Were they to have given him both titles, they would basically be making the statement that they feel he is the balanced professional, which I think the markets would have widely rejected," he said.

Activist investors support the separation of the chief executive and chairman roles, saying it helps establish a board with the best interests of shareholders in mind.