It is not as if Mr. Pandit, 53, has not tried. Since succeeding Charles O. Prince III in late 2007, he has strengthened the lax risk management practices that got Citigroup into so much trouble. He has cut 110,000 jobs, about a third of the company’s work force, and stanched losses from toxic mortgage investments. Helped by three multibillion-dollar federal bailouts, he also has bolstered Citigroup’s finances and slimmed down the company, selling $351 billion in assets in a challenging market.
“We have made enormous progress in 2009,” Mr. Pandit said on Tuesday. The question is whether Citigroup and its leader are progressing quickly enough to satisfy restive employees and shareholders. Even some Citigroup executives say privately that they are worn out after a seemingly endless stream of late-night calls, emergency meetings and management turmoil.
And while Citigroup’s share price has recovered from the panicked lows of last March, when it was less than $1, it is still a small fraction of what it was before the crisis. On Tuesday, Citigroup rose 12 cents, to $3.54. That is down from a record high of $57 in December 2006.
Given that showing, Mr. Pandit is under pressure to prove that the company can finally make money. Prince Walid bin Talal of Saudi Arabia, a major Citgroup shareholder, said last week in an interview with the Fox Business Network that he had told Mr. Pandit that the honeymoon was over. “Now it’s time to deliver,” he said.
Citigroup’s fourth-quarter loss reflected a $10.1 billion accounting charge tied to leaving the federal bank bailout program. While other big banks have freed themselves from the government completely, taxpayers still own 27 percent of Citigroup.
Most of Citigroup’s recent losses stemmed from bad loans and investments it made before Mr. Pandit took over. Now he must lead the bank into a profitable future, not just cope with its past mistakes. And much will depend on the course of the global economy and the new regulations from Washington — things that are beyond his control. Any number of potential shocks, an economic setback in the United States, or a government default abroad, for example, could derail his plans for a turnaround.
“If you look at what he has done since becoming C.E.O., he has undertaken a lot of actions to steady the ship,” Jason M. Goldberg, an analyst at Barclays Capital, said of Mr. Pandit. “It’s been slow, but, that said, it takes a long time to turn an oil tanker, and clearly the current is stronger.”
Citigroup may be stronger than it was in the depths of the crisis, but it is still a symbol of the bailout era. The Financial Crisis Inquiry Commission, formed by Congress to investigate the causes of the panic, plans to devote a separate hearing to what went wrong at Citigroup.
Despite signs that Citigroup’s losses are moderating overseas, its North American mortgage and credit card businesses keep hemorrhaging billions of dollars given the weakness in the jobs and housing markets.
“Whether these trends continue will depend on the U.S. economy,” said John C. Gerspach, Citigroup’s chief financial officer, during a conference call with reporters on Tuesday. Mr. Gerspach also warned that more stringent credit card rules could cripple profits and that the fate of the administration’s mortgage modification program could affect the company’s results. That program, by allowing the bank to delay booking losses on eligible borrowers who fell behind on their loan payments, reduced its credit losses by about $200 million in the fourth quarter.
Whatever happens, Citigroup executives see a long slog ahead. When Mr. Gerspach was asked about the bank’s growth areas for 2010, he reframed the question and noted the bank’s long-term focus on emerging markets.
And Mr. Pandit’s job of regaining Wall Street’s trust could become even harder. Bank officials revealed on Tuesday that they had previously overstated certain accounting adjustments, which rise and fall each quarter based on investors’ perception of the riskiness of bank-issued debt. The officials identified the problem when they changed certain accounting practices. Now those figures need to be readjusted — lowering 2009 earnings by $840 million. “We corrected a mechanical miscalculation,” Mr. Gerspach said on the conference call without elaborating.
Citigroup’s traders and investment bankers, however, are focused on the present, specifically on the size of their year-end bonuses. After reports circulated that Citigroup’s bonus pool would be about $5.3 billion, roughly the same as in 2008, despite improved results for 2009, investment bankers started to grumble.
Although many could receive multimillion-dollar bonuses, the bank is capping cash payouts at $100,000. Executives say they are worried that some rainmakers will quit once bonus checks are distributed in the next few weeks.
Others worry that Mr. Pandit lacks the charisma to lead such a huge company, and relies too heavily on small circle of confidants who sometimes give him bad advice. Last week, he announced yet another management shake-up, this time removing Teresa A. Dial, Citigroup’s head of the global consumer banking, after just 18 months. Two of Mr. Pandit’s lieutenants, Don Callahan, administrative chief, and Lewis B. Kaden, a vice chairman, were also stripped of important duties.
Lisa Caputo, Citigroup’s chief marketing officer, is expected to take expanded responsibilities steering a new council, on which Mr. Pandit will sit, that will manage and position the global Citi brand, people briefed on the changes said. She also will lead digital advertising initiatives, though she may give up oversight of corporate communications. Mr. Pandit added strategic planning to the duties of Ruchi Madan, his chief of staff.
For now, at least, some analysts are still willing to give Mr. Pandit some additional time.
“While there is a lot of frustration, it’s not directed at Pandit,” Mr. Goldberg said. “It is directed at the predicament.”