Today, Mr. Pandit is still at the helm, and through a series of small but important moves, he is quietly asserting his influence. Piece by piece, he is shedding complex businesses like the insurance and retail brokerage units, shrinking the bank’s balance sheet and stabilizing its finances.
Slowly, Citigroup is breaking with its troubled past. Indeed, when the Financial Crisis Inquiry Commission begins hearings this week on Citigroup’s near collapse, the panel will focus not on Mr. Pandit but on his predecessors: the former chief executive Charles O. Prince III and Robert E. Rubin, an influential board member and adviser.
Mr. Pandit, who is accepting only $1 a year in pay until his bank is consistently profitable, still would not make anyone’s short list of powerful Wall Street executives. But his stock is rising steadily along with that of Citigroup, which climbed 2 percent on Monday to close at $4.26.
Some of Mr. Pandit’s most trusted advisers notice a new bounce in his step and say he is more energetic at meetings.
“Vikram is looking and sounding a lot more confident and secure,” said one top lieutenant. “He has a smile on his face. He sees the day when he is going to earn more than a $1 a year.”
That day, of course, may still be months away. With unemployment still high, losses tied to Citigroup’s mortgage and credit card businesses have continued to climb. New financial rules, still being determined in Washington, could dampen profits further.
Even so, with the markets and the economy over all on the rebound, Citigroup could beat Wall Street’s break-even consensus estimate and turn an operating profit for the first quarter. It reports on April 19.
What is more, the government will soon begin selling off its 27 percent stake to private investors — welcome news to taxpayers who stand to turn a multibillion-dollar profit.
“He inherited a huge hole and is doing the best he can,” said Charles Peabody, a longtime banking analyst at Portales Partners in New York. “But he has had to mortgage the future earnings power of the bank to repair the balance sheet.”
“That is what I am having a hard time envisioning — when will that earnings momentum emerge?” he added.
That question has been posed from the day Citigroup was forged by the blockbuster merger of Citicorp and the Travelers Group in 1998. At the time, Sanford I. Weill, its co-chairman and founder, vowed that the bank would become an earnings juggernaut with operations all over the globe.
Mr. Weill promoted the idea of a financial services supermarket that could offer customers “one-stop shopping” among businesses as varied as retail banking, credit card lending, investment banking and insurance. The poor performance of one business or region could be offset by stronger results in others, helping to reduce risk.