Times of India
WASHINGTON, Dec 12: Vikram Pandit, a Nagpur-born NRI and a Citigroup neophyte who wowed Wall Street before intense flames began licking the financial world, was on Tuesday named CEO of the world's largest bank in what many see as a rescue mission.
Pandit, whose elevation had been in the air for several days, replaces the charismatic Charles O.
"Chuck" Prince III, who was forced out after the giant bank in November this year after it reported its first loss in 17 years amid a massive financial crisis. Prince had brought him into Citigroup only a few months earlier.
On Tuesday, the Citigroup board led by its chairman, former Treasury Secretary Robert Rubin fulfilled Wall Street expectation by picking Pandit as CEO, while naming Win Bischoff, who was functioning as interim CEO after Prince left, as chairman. Rubin, also a stand-in, returns to his previous duties as Citi director and chairman of the executive committee of the board.
Pandit, who is 50, is the first person of Indian origin to scale such stratospheric heights in the financial world, which has many well-regarded Indian executives. Citigroup has operations in more than 100 countries, with 300,000 employees and $ 2 trillion in assets.
Some reports has hyperbolically projected a toss-up between Pandit and former Pakistan prime minister Shaukat Aziz for the CEO job, but the latter, a former mid-level Citibank executive, was not even in the picture, and the story appeared more a flight of fancy by those consumed with India-Pakistan equation.
If anything, Pandit edged out another Indian, Ajay Banga, who runs Citigroup's international-consumer group, for the plum job or the poisoned chalice, depending on one view. Others in the running included former Citigroup President Robert Willumstad and Michael Neal, who runs General Electric Co.'s (GE) commercial-finance business.
The word on the street in the financial world is that Pandit was the consensus choice, and particularly favored by Rubin, who has tracked his career for several years. According to one account, Rubin became aware of Pandit at a private meeting of Wall Street executives in late 1999 at the Century Association, a
161- year-old private club in Manhattan.
The meeting was hosted by then-Securities and Exchange Commission Chairman Arthur Levitt, who wanted ideas on changes needed for US stock markets. Pandit, who is credited with building the electronic trading system at the investment banking group Morgan Stanley, was so articulate in his responses that Rubin asked the person next to him who he was.
Before joining Citigroup, Pandit served as president and chief operating officer at Morgan Stanley from 2000 to 2005. He left Morgan Stanley, and in 2006, formed Old Lane Capital, a hedge-fund firm, that Citigroup acquired in April this year for $ 600 million.
Vikram Shankar Pandit, the son of a pharma representative and businessman, came to the United States when he was only 16 for undergraduate studies at Columbia University, home to several prominent Indian academics including the economist Jagdish Bhagwati$, and alma mater of Dr B R Ambedkar.
He earned a bachelor's degree and a master's degree in electrical engineering before switching to finance and earning a Ph.D Mentors cited in a recent profile described him as a relentlessly hardworking student, the kind who relished challenges.
He will have monumental ones at Citigroup. The bank has suffered staggering losses in recent times in the mortgage melt-down and other exposures. Shares of Citigroup dropped to below $ 30 for the first time in five years even as the financial flame-out consumed CEO Prince and many other Wall Street stalwarts.
The situation was considered so dire that a $ 7.5 billion capital infusion by the Abu Dhabi Investment Authority last month was seen as a part bailout from the nearly $ 17 billion write-off relating to soured mortgages.
Pandit is seen as a cautious, conservative banker.
Many experts say the new CEO will need not just punditry but also some wizardry to extricate the bank from the mess.
In a statement following his elevation, Pandit said he would "undertake an objective and dispassionate review of all the businesses, individually and in aggregate, to make sure we are properly positioned for the future."
He also promised simplify the company's organizational structure, align businesses and resources with appropriate goals, with economic realities being among our initial priorities, a sure sign that there will be some soul-searching and cleansing.