Citi rearranges top tier as split-up nears

Vikram Pandit has reshuffled the top ranks at Citigroup Inc. several times since becoming chief executive 13 months ago.

Vikram Pandit has reshuffled the top ranks at Citigroup Inc. several times since becoming chief executive 13 months ago.
He moved around the deck chairs one more time Tuesday, when he identified the people who will run the different parts of his soon-to-be-split-up bank.
The plum job was awarded to John Havens, a former top Morgan Stanley executive who was summoned to Citi shortly after Mr. Pandit took the helm.
Mr. Havens was named head of the global institutional bank at Citicorp, the healthy part of Citigroup that consists of the firm’s corporate and investment bank, private bank, and retail banking operations around the globe.
The difficult task of managing the terribly sick bits of Citi falls, at least on an interim basis, to Mike Corbat.
Though relatively unknown, Mr. Corbat last September replaced Sallie Krawcheck as head of Citi’s global wealth management unit, the firm’s only division to turn a profit in the fourth quarter.
His responsibilities stood to be much reduced after Citi, at the nudging of the federal government, agreed to sell a majority stake in its Smith Barney brokerage unit earlier this month.
In his new role, Mr. Corbat will be in charge of Citi Holdings, which is to contain $800 billion of ailing mortgages, hybrid securities, and other troubled assets. It will employ fully 100,000 of Citi’s more than 300,000 staffers.
Mr. Pandit underscored the dire state of Citi Holdings when he said he expects it will over time have “positive value.” In other words, right now it has nothing of the sort.
The management changes were unveiled shortly before Mr. Pandit appeared at a conference sponsored by Citi. In his remarks, he tried to paint a picture showing better days ahead for Citi as it prepares to return to its roots and rope off nearly all the businesses it inherited from the 1998 merger with Travelers Group.
Mr. Pandit even asked if anyone in the audience at the Waldorf-Astoria Hotel had questions about the $50 million corporate jet that the bank was forced to turn down under furious pressure from its largest shareholder, the U.S. government. (No one dared a question.)
He added that Citi, for all its difficulties, remains a strong company that will benefit when the economy recovers thanks to “our globality.”
The audience stirred when a questioner asked Mr. Pandit about the odds that one of the large U.S. banks would be nationalized. Mr. Pandit was tongue-tied for an instant but regained his composure and insisted that such a scenario is highly unlikely.
“You can’t nationalize just one bank,” he said. “I think the commitment to a fre-market financial system supported by private capital is extremely strong.”