Citigroup CEO Prince to resign: reports

By Dan Wilchins and Jonathan Stempel

NEW YORK (Reuters) - Citigroup Inc (C.N) Chief Executive Charles Prince plans to resign this weekend, the Wall Street Journal said, as the widening subprime mortgage crisis deals a final blow to a reign long under attack.

The largest U.S. bank by assets plans to hold an emergency board meeting on Sunday, at which Prince will step down, the newspaper said on Friday, citing people familiar with the situation.

Citigroup spokesman Michael Hanretta declined to comment. Prince did not immediately return a call to his office.

Speculation that Prince would soon leave the bank had swirled for weeks after a $6.5 billion third-quarter write-down fed fears of more losses to come, dragging Citigroup's shares to a 4-1/2-year low.

Directors at Sunday's meeting are also expected to discuss the possibility of another large write-down, The New York Times said. A search committee would be formed to find a successor to Prince, the newspaper said, citing people close to the board.

"Prince had told investors this would be the year of no excuses. It unfolded into a year of lots of excuses," said Thomas Russo, a partner at Gardner Russo & Gardner in Lancaster, Pennsylvania, which invests more than $3 billion and owns Citigroup shares.

Citigroup stock is down 32 percent this year, and fell 78 cents to $37.73 in Friday trading. They rose to $39.01 after-hours as reports of impending Prince's exit surfaced. The cost of protecting the company's debt against default has shot up to levels that imply the bank's credit ratings should be cut.

Prince's departure would be the second of a top Wall Street executive in less than a week. On Tuesday, Merrill Lynch & Co MER.N ousted Chief Executive Stan O'Neal after an $8.4 billion write-down.

A lawyer by training, Prince is widely credited with having addressed Citigroup's many legal and regulatory problems after he replaced Sanford "Sandy" Weill in October 2003.

But he has struggled to consistently boost revenue faster than costs, raising worries about whether Citigroup has sufficient capital to grow and boost profitability.

It was not immediately clear who might replace Prince. Analysts have said the bank has few, if any, candidates ready to step in now, following a series of high-level management departures under Prince.

Robert Rubin, the former Goldman Sachs & Co chief and U.S. Treasury Secretary who chairs Citigroup's executive committee, was being floated as an interim replacement, but is reluctant to take over, the Journal said.

"He may not want the job, but if you are a Citigroup stockholder, you would wish he would take over," said James Armstrong, president at Henry H. Armstrong Associates, which does not own the bank's shares.

Other possibilities have included John Thain, another former Goldman executive who now runs NYSE Euronext (NYX.N) (NYX.PA).

Prince does not have an employment contract. It was not immediately clear how much money he would depart with. He has close to 744,000 restricted shares worth about $28 million, and owns more than $60 million of Citigroup stock directly, according to filings with the U.S. Securities and Exchange Commission. O'Neal's exit package was about $161.5 million.