Citigroup Inc Chief Executive Vikram Pandit has resigned, effectively immediately, a shock change at the top of the bank just one day after surprisingly strong quarterly results.
A statement on Tuesday from Chairman Michael O'Neill said Michael Corbat, previously chief executive for Europe, Middle East and Africa, would succeed Pandit as CEO and become a board member.
Chief Operating Officer John Havens, a long-time associate of Pandit, also resigned.
After falling 2.5 percent before the market opened on news of Pandit's departure, Citigroup shares rose 1.7 percent to $37.30 in early trading on the New York Stock Exchange.
Following are initial reactions of analysts and investors:
MICHAEL JONES, CHAIRMAN AND CHIEF INVESTMENT OFFICER, RIVERFRONT INVESTMENT GROUP, LLC, RICHMOND, VIRGINIA
"It raises tremendous questions. I think you can only attribute it to one of two things: either he has the most incompetent public relations people advising him on how to handle something like this, or something suddenly has been revealed that has caused him to have to step down, and not just step down but also step off the board immediately. All of these things are just red flags everywhere."
"It will be a headwind for the financial sector specifically if this proves that there's another major financial hiccup at a money-center bank."
ANTHONY POLINI, ANALYST, RAYMOND JAMES
"The announcement of Corbat is a big plus for the company: he has great leadership capabilities. I think he will probably be in a better position to get regulatory approval for the return of excess capital."
"I think Vikram has some regulatory baggage. I don't think he was very liked by the regulators. I think they, for whatever reason, had some disagreements."
MARTIN MOSBY, STOCK ANALYST, GUGGENHEIM SECURITIES
"If it was a natural transition of any sort, the timing would not be now. You would announce it in January and you would set up a transition period that would be completed in probably April."
"What didn't happen is that the chief financial officer is not resigning, so that says it wasn't related to the financials."
"There is probably an underlying difference between Pandit, and Havens, and the board."
MIKE HOLLAND, CHAIRMAN, HOLLAND & CO, NEW YORK, OVERSEEES MORE THAN $4 BILLION OF ASSETS
"It's not a shock that he's no longer there, but the surprise is, this is all happening very quickly. Why is he leaving immediately? Normally you have a transition period. And Havens is gone too. I'm not a Citi shareholder, but if I were, I'd be disappointed that Havens is gone, in some ways more than Pandit."
ADAM SARHAN, CHIEF EXECUTIVE OF SARHAN CAPITAL, NEW YORK
"The timing of the move is shocking. Why they didn't announce it with the earnings is a question that needs to be answered. But Pandit is leaving at the top of his game and leaving the company in great hands. As an investor, my only question is with the timing. "
GAUTAM DHINGRA, CHIEF EXECUTIVE AND FOUNDER, HIGH POINTE CAPITAL MANAGEMENT LLC, CHICAGO
"Our outlook on Citigroup is positive. We are positive on banks in general and more so on Citibank because of the higher potential reward.
"As to Pandit's resignation, we are scratching our heads. Our view has always been that he was not really adding much value. So, in that sense we are not sorry to see him leave.
"However, the abruptness of the resignation does cause a bit of worry. Why did it have to be an abrupt, rather than a graceful exit?"
JEFF HARTE, EQUITY RESEARCH ANALYST, SANDLER O'NEILL, CHICAGO
"I think Vikram had them on the right path strategically so I am disappointed for him."
"I don't get the impression there are significant underlying issues driving this. I think this is more the board reacting to the share price and wanting a more hands-on manager in the CEO position."
MATT MCCORMICK, BANKING ANALYST AND PORTFOLIO MANAGER AT BAHL & GAYNOR, CINCINNATI, OHIO
"Pandit struggled to get an identity for Citigroup and I would say ultimately he was unsuccessful in having people know what Citigroup stands for and what it does."
"He was not beloved by Wall Street. He was the accidental president. He was thrust into that position- he's a hedge fund guy."
"What Pandit and Havens did was increase the uncertainty around Citi. There's a perpetual cloud of uncertainty surrounding Citigroup. There's always turmoil. . .that's had to affect the (stock) price."
PETER JANKOVSKIS, C0-CHIEF INVESTMENT OFFICER, OAKBROOK INVESTMENTS LLC, LISLE, ILLINOIS
"Interesting, and after the stock reported pretty good numbers yesterday, I'm surprised.
"It does seem strange to me that someone would step away after reporting better-than-expected numbers and certainly do a lot to reconfigure the company for going forward. I would have expected he wanted to stay around and see some of the fruits of his labors there."
(Reporting By Chuck Mikolajczak, Phil Wahba, Ryan Vlastelica, Herbert Lash, Dan Wilchens, David Henry and Samuel Forgione)