Citigroup names Pandit CEO, Bischoff chairman

NEW YORK (Reuters) - Citigroup Inc (C.N) on Tuesday named Vikram Pandit, head of its institutional clients group, as chief executive and said Win Bischoff would serve as nonexecutive chairman, effective immediately.

The bank, which had been seeking a successor to former CEO Charles Prince, said Robert Rubin will return to his previous duties as chairman of the executive committee.

Pandit is a former Morgan Stanley (MS.N) capital markets executive.

The following is reaction from industry analysts:

TIMOTHY GHRISKEY, CHIEF INVESTMENT OFFICER AT SOLARIS ASSET MANAGEMENT:

"This will be greeted favorably by investors. It's unfortunately coming at the exact moment that the market is reacting to the Fed news, so it's hard to tell at the moment. But I think when the dust settles, there will be positive reaction to this both in the near term and over the long term as well."

"Pandit's name has obviously been floated out there for quite a while now, that big investors would have had time to speak up. They would not have done this if they hadn't gotten favorable response from their large investors. People have already gotten used to the idea."

"Pandit's definitely got the experience. He's got support inside the company and outside the company, which is crucial."

HENRY ASHER, PRESIDENT OF NORTHSTAR GROUP, A NEW YORK-BASED MONEY MANAGER

"This is the model these institutions need and want to have -- someone in a position of operating power and a non-executive chairman to oversee the bigger picture."

"It's not a huge negative, but the concern is that they felt they couldn't afford to lose someone (Pandit) who is unproven in this kind of role. They spent $800 million to buy him and a hedge fund that is underperforming the S&P 500. That's great work if you can get it."

"Think of the people they could have gotten for this role who didn't make themselves available or didn't want it. People with experience running a major money center bank. People with experience running a massive corporation. And they couldn't get someone like that."

"The person who comes out looking pretty good in all this Wall Street reshuffling is Jamie Dimon at JPMorgan."

WILLIAM SMITH, CEO OF SAM ADVISORS, A CITIGROUP SHAREHOLDER AND LONG-TIME CRITIC OF THE COMPANY:

"It's disappointing. Pandit is probably a decent manager but he is a segment manager. He is not a CEO. Win Bischoff is an absolute disgrace -- he has absolutely no reason to be even near the chairmanship.

"The fact that Robert Rubin goes back to his $17 million-a-year lobbyist position is disturbing.

"This is Citigroup. What is going to have to happen here is you are probably going to have to continue to see big mess-ups.

"As we go through time, they are probably going to be forced to break the company up instead of doing it on a proactive basis ..."

"The people that are good are not going to leave where they are."

MILTON EZRATI, SENIOR ECONOMIST AND MARKET STRATEGIST AT LORD ABBETT & CO, WHICH OWNS CITI SHARES

"To some extent, the resolution of this situation will help because Citigroup has been leaderless for a while and this will at least give them some clarity. Although splitting it continues the ambiguity."

(Reporting by Muralikumar Anantharaman, Mark McSherry and Jessica Hall; editing by John Wallace)