Citi Shakes Up Top Ranks

(Updates final share price.)

Citigroup ( C) is shaking up its highest ranks, promoting an executive many believe is being groomed as an eventual successor to CEO Vikram Pandit.

The New York-based company said on Thursday that CFO Edward "Ned" Kelly, 56, will become vice chairman and take on broader responsibilities for strategy and M&A. Kelly will work closely with Pandit "to drive the execution of Citi's strategic and operational priorities," the company said.

John Gerspach, Citi's controller and chief accounting officer, will replace Kelly as CFO, it said.

Separately, former CFO Gary Crittenden is leaving the company. Crittenden, 56, resigned as chairman of Citi Holdings, the company's so-called "bad bank," to join Palo Alto, Calif., private equity firm Huntsman Gay Global Capital as a managing director, according to a separate release.

"I have been interested in private equity for many years and after a long career working with large public companies, the time is right to pursue this interest," Crittenden said. "Huntsman Gay presented me with the ideal opportunity to apply my experience with Fortune 500 companies to the middle market, where there are many compelling businesses we can help make significant improvements and become market leaders. I am very excited to enter this new phase of my professional life and join the outstanding team at Huntsman Gay."

Citi had originally said that Crittenden was relocating to Utah to devote more time to his family and other business interests.

Pandit said the changes "will further help in positioning our company for the future."

"Our relentless focus on executing against our strategic priorities at Citi continues as we remain focused on rationalizing Citi Holdings, and on Citicorp as our core operating business," Pandit said. "We are making consistent and substantial progress towards these goals."

Kelly's name has increasingly been popping up as a possible successor to Pandit as the bank continues to struggle. Former US Bancorp ( USB) chairman Jerry Grundhofer, who now sits on Citi's board, has also been named as a possible successor to Pandit.

" I t seems like the company's new owner (the government) is clearly positioning to get rid of Pandit," says Cassandra Toroian, president and chief investment officer of Bell Rock Capital.

Toroian speculated that Pandit's lack of commercial banking skills and background and the Federal Deposit Insurance Corp.'s "desire to make sure those in the banking business have real skills in banking lead to the conclusion he'll be gone soon" -- possibly even before they announce second-quarter earnings on July 17, she writes in an email.

Kelly , who was promoted several times within Citi's investment banking ranks, replaced Crittenden as the company's CFO in March.

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