KBW Bank Index
(I:BKX) declined slightly to close at 50.26, with 16 of the 24 index components down for the session.
Citigroup announced before the market open that Pandit resigned, effective immediately, with no explanation why.
Citi president and chief operating officer John Havens -- who along with Pandit joined the company in 2007 -- also resigned, one day after investors sent Citigroup's shares up 5.5%, after the company reported good third-quarter results.Pandit's long-term "good bank/bad bank" strategy for Citigroup was to right-size the company's balance sheet and free up capital by placing noncore assets within the Citi Holdings subsidiary, and allowing them to run-off. This strategy was a success, with total assets of Citi Holdings declining by 31% from a year earlier, to $171 billion, and making up just 9% of the company's total assets. Citigroup's board of directors ""elected Michael Corbat CEO and a director of the Board," after he previously served as the company's CEO of Europe, Middle East and Africa, and also headed Citi Holdings. In an interview with Bloomberg, Pandit insisted that the decision to leave was his: "Certainly I wouldn't have done this unless I thought it was the right time. This is a decision I made, after the third quarter, particularly after the great reaction" among investors. "I don't believe in having lame-duck sessions. I don't believe in having the outgoing CEO looking over the shoulder of the new CEO," he said. Pandit also said he felt "very good about the decisions that we've made," that "it's hard to come up with things that should have been done differently. I was first out of the box to raise capital." "The job was about transformation and turnaround, and we've done the turnaround," he said. Writing for Real Money, Jim Cramer said that Pandit's removal "had nothing to do with compensation or personal ethics, and there was no smoking gun. The board just apparently did not think Pandit could take the company where it needed to go." Cramer went on to call the move "shocking -- shocking to those who know Pandit, and especially shocking because Citigroup has delivered its best quarter since Pandit had taken over. It had the perfect mix of better net interest margin, good growth overseas and improving global market share. This has been accomplished, moreover, at a time when the emerging markets have been doing poorly. That makes it quite an achievement."
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