There is speculation that Vikram Pandit’s head (figuratively speaking) is about to roll. The NY Post says Pandit’s job security as Citi’s CEO is increasingly in jeopardy as momentum grows in Washington to oust him.
From NY Post: With the bank stress tests wrapping up, sources tell The Post that regulators think they might have to make the bold move of removing Pandit to signal Washington is taking as hard a line with the banks as it did with General Motors when it effectively ousted GM CEO Rick Wagoner.
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Such a move isn’t without its own risks, though. In an interview with The Post, Citi CFO Ned Kelly said, “Replacing [Pandit] would be dramatically de-stabilizing both for Citi and the system.”
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Replacing Pandit might be the pound of flesh some shareholders want, but it’s possible such a move would do little to help the firm. Indeed, sources said possible successors like Kelly are loyal to Pandit, and others like Gary Crittenden, the new CEO of Citi Holdings, may not be willing to take on the role.
According to the publication, there is criticism that Citi hasn’t done enough to clean up its balance sheet and speculation that the company may need additional capital amid rising writedowns from consumer debt.
A Citi spokesperson in a statement said, “Our recent quarterly results reveal the underlying strength of the franchise and Vikram Pandit’s strategy at work to restore Citi to profitability”.
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