Citigroup In 'CEO Limbo' As Stock Skids Further

Chuck Prince is out, but it's far from clear who will take over as CEO of Citigroup, the nation's largest bank.

Sandy Weill.
Sandy Weill.

Just a day after Prince stepped down because of huge writedowns from the subprime crisis, Citigroup has begun the search for a successor. Some names being thrown around include everyone from former chairman Sandy Weill to NYSE Euronext CEO John Thain to BlackRock's Larry Fink.

The search also comes as two other big companies, Merrill Lynch and Time Warner, have lost or will lose their CEOs. Merrill's Stan O'Neal left the firm last week over big losses at the firm, while Time Warner's Dick Parsons plans to announce today that he will step down.

But the search for a successor at Citigroup has garnered the most attention so far, in part because it's involved some of the biggest names in business. Still, with the bank in "CEO limbo," as one analyst described it, Citigroup is being shunned by investors, who continued to hammer the stock on Monday.

As reported by CNBC, Citigroup's largest shareholder, Saudi Arabian Prince Alwaleed bin Talal, may want former CEO Weill to run the company, at least on an interim basis. But Weill told CNBC on Monday that he's not interested in returning to run the company. And according to a member of Citigroup's board, the board had no interest in bringing Weill back.

Also, Larry Fink, who runs BlackRock and is in the running to take over as CEO of Merrill Lynch, is being considered for the CEO job at Citigroup.

Another name being mentioned is Thain, although he apparently does not have that much support from members of Citigroup's board.

As reported earlier, Vikram Pandit, who heads Citi's investment banking and alternative investment businesses, has told people inside the company that he will quit if Citi selects Thain.

John Thain
John Thain

Last week, before Prince stepped down, Weill and Markets and Banking CEO Michael Klein traveled in a Citigroup jet to Riyadh for talks with Alwaleed. At some point, they discussed Weill's possible return to the bank.

Reached on Monday, Weill told CNBC that he's not interested in returning but is ready, willing and available to do whatever the board needs him to do in helping to right the ship.

"I care so much about this company and its shareholders," Weill said. "I am here to help."

Alwaleed, who had initially expressed support for Prince and Citigroup's management after the banking giant reported big writedowns, withdrew his backing and phoned Weill on learning that further writedowns were to come.

Larry Fink
Larry Fink
Larry Fink

Alwaleed's stake in Citigroup has lost around $4 billion in the last three weeks.

According to Robert Rubin, who assumed the role of Citigroup chairman over the weekend, Prince was not forced out of his job, but instead chose to resign, saying it was the only honorable thing to do given the continuation of losses at the company.

Rubin was formerly Treasury secretary and co-chairman at Goldman Sachs.

Sir Win Bischoff, chairman of Citi Europe and a member of Citi's Business Heads, Operating and Management Committees, will serve as acting CEO.

While the search for a new CEO goes on, Citigroup's stock continued to get hit hard.

Michael Mayo, an analyst at Deutsche Bank, told CNBC that he is maintaiing his "sell" rating on the stock for three reasons: the company is in a period of "CEO limbo," Citi may still be in a "downward spiral" in terms of its credit ratings, and the fourth-quarter to be "another kitchen-sink quarter" of more losses.

"It would be a total disaster if Sandy Weill came back to this company," Richard Bove, a financial strategist at Punk Ziegel, told CNBC. "I think Citigroup needs to go out and talk to a couple of dozen new people, who are not associated with any part of the past of this company and bring in people who can bring in let's say a fresh look and a fresh view to the company."