Citigroup Board Expected to Pick CEO This Week
Citigroup's board is planning to meet this week to choose a new chief executive to replace Charles Prince, who stepped down last month amid mounting subprime losses at the banking giant.
The current frontrunner for the CEO job is the head of Citi's investment bank and alternative investments businesses, Vikram Pandit.
Sources inside Citi told CNBC that Pandit "is acting" as if he has the CEO job, though they may name someone else as chairman. Possible candidates include the current chairman, Robert Rubin, or Bob Willumstad, current chairman of AIG.
Investors will be demanding fast results from whoever is named CEO. He will have to decide on how to cut costs--managers have already been asked to come up with headcount reductions --and the future direction of the firm. That would include the question of whether Citi breaks up or remains a financial supermarket.
Pandit worked at the brokerage Morgan Stanley for about 11 years until 2005, when he and some Morgan Stanley colleagues quit and later founded the hedge fund Old Lane Partners. Earlier this year, Citigroup bought Old Lane for $800 million and put Pandit in charge of Citi's alternative investments.
Then, after Citi warned in October of multi-billion-dollar losses during the third quarter due to bad bets on subprime mortgages, Pandit was promoted to lead a unit that combined the markets and banking segment with alternative investments.
Citigroup estimated on Nov. 4 that it would have to write down an additional $8 billion to $11 billion in the fourth quarter. It was the same night that Charles Prince stepped down from the CEO position, and former Treasury Secretary Rubin was named chairman. Citi's European chief Win Bischoff was appointed interim CEO.
Citigroup spokespeople declined to comment to Reuters on whether the board was meeting next week or about the search committee's progress.
--Reuters contributed to this story