Pandit's Legacy

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Rank: Senior Neanderthal | 4,232

Why did Vikram choose yesterday to resign? Citi's results were neither poor enough to justify him being forced out nor were they good enough for him to say he'd done his job. We may never know the true reasons (Boardroom coup? Salary arguments? First rat off a sinking ship?) but we can nevertheless examine his legacy.

The headline numbers show Pandit presiding over an 89% fall in the share price of Citi, pretty terrible especially when you consider that HSBC and JPM have been broadly flat over the same period. There has also been vast amounts of accounting wizardry done so that nobody knows what the hell is going on there. They have struggled to dispose of toxic assets, sold good assets at a loss and much more.

However, look at what Pandit has had to deal with. He's had to reduce costs dramatically - both by cutting compensation and headcount, manage a global behemoth which endured a forced bailout by the government, cater to shareholders wanting buybacks and then being denied that opportunity by the regulators AND double the Core T1 equity Basel III demands. I doubt if others would have done any better than Vikram.

Management announced 'no change in strategy' so it will be interesting if nothing else to see where they go from here. Will they buy UBS's investment banking arm? Will they focus on emerging markets and corporate banking? Will they merge with Morgan Stanley? How will they handle their colossal mortgage write downs? We shall have to wait and see....

Comments (15)

Oct 18, 2012

merge with MS?!

please no..

Oct 18, 2012
Asatar:

manage a global behemoth which endured a forced bailout by the government

You cannot be serious. "endured a forced bailout." Let's be crystal clear:

Without TARP and myriad other gov't bailout measures, it would've been game over for Citigroup. End of story.

The man was vastly overpaid for middling-at-best performance despite all the freebies TBTF banks get. C'mon man!

    • 1
Oct 18, 2012
TheKing:
Asatar:

manage a global behemoth which endured a forced bailout by the government

You cannot be serious. "endured a forced bailout." Let's be crystal clear:

Without TARP and myriad other gov't bailout measures, it would've been game over for Citigroup. End of story.

The man was vastly overpaid for middling-at-best performance despite all the freebies TBTF banks get. C'mon man!

That's why the FDIC was created when Glass-Steagall was passed. We would have survived.

Regional banks and credit unions would become the new behemoths, boutique and MM banks would thrive off of deals, and people will have learned their lesson that commercial and investment banks coexisting under one roof is unsustainable.

    • 1
Oct 18, 2012
BTbanker:
TheKing:
Asatar:

manage a global behemoth which endured a forced bailout by the government

You cannot be serious. "endured a forced bailout." Let's be crystal clear:

Without TARP and myriad other gov't bailout measures, it would've been game over for Citigroup. End of story.

The man was vastly overpaid for middling-at-best performance despite all the freebies TBTF banks get. C'mon man!

That's why the FDIC was created when Glass-Steagall was passed. We would have survived.

Regional banks and credit unions would become the new behemoths, boutique and MM banks would thrive off of deals, and people will have learned their lesson that commercial and investment banks coexisting under one roof is unsustainable.

I'm not sure how long you've been on this site, but I am the most anti-TARP, anti-bank bailout guy there is. I wanted them to let the banks fail. I wasn't implying that the bailouts were good, simply that Citigroup needed them to survive, so saying that they had to "endure" them is asinine.

Best Response
Oct 18, 2012
Asatar:

We may never know the true reasons (Boardroom coup? Salary arguments? First rat off a sinking ship?) but we can nevertheless examine his legacy.
<!=break>

It was a boardroom coup, I went to high school with the son of the member of the board and was able to speak to him for a little while earlier today. He said that the board and Pandit had opposite views on the future of the company and neither wanted to budge. Basically Corbat had more backing and shared the views of a majority of the board on the future of citigroup.

"The way to make money is to buy when blood is running in the streets."

-John D. Rockefeller

    • 2
Oct 18, 2012
carlfox:
Asatar:

We may never know the true reasons (Boardroom coup? Salary arguments? First rat off a sinking ship?) but we can nevertheless examine his legacy.
<!=break>

It was a boardroom coup, I went to high school with the son of the member of the board and was able to speak to him for a little while earlier today. He said that the board and Pandit had opposite views on the future of the company and neither wanted to budge. Basically Corbat had more backing and shared the views of a majority of the board on the future of citigroup.

The conference call with the Chairman and new CEO must have been complete bullshit then, because most of the ER analysts who called asked about future plans for the company. They both responded that they will continue with the path they are on, and they currently have no plans for big changes.

    • 1
Oct 18, 2012
BTbanker:

The conference call with the Chairman and new CEO must have been complete bullshit then, because most of the ER analysts who called asked about future plans for the company. They both responded that they will continue with the path they are on, and they currently have no plans for big changes.

I think this goes along with the idea that it was a friendly exit. They can't they are going to drastically change anything or else people will automatically assume it was a coup. I think we see change in citi within the next few months to a year including the stock buyback and ending a partnership citi has with MS which Pandit tried and failed to do. Considering that Citi stock price dropped close to 90% under Pandit I am surprised that the board didn't push him out sooner. From what I understand the board backs Corbat completely and they share similar views on the future of citi.

"The way to make money is to buy when blood is running in the streets."

-John D. Rockefeller

Oct 19, 2012
carlfox:
Asatar:

We may never know the true reasons (Boardroom coup? Salary arguments? First rat off a sinking ship?) but we can nevertheless examine his legacy.
<!=break>

It was a boardroom coup, I went to high school with the son of the member of the board and was able to speak to him for a little while earlier today. He said that the board and Pandit had opposite views on the future of the company and neither wanted to budge. Basically Corbat had more backing and shared the views of a majority of the board on the future of citigroup.

Very cool to know - thanks for sharing.

Would you mind posting some any additional details you have on it, or how you got the information (to help assure us you're not trolling, haha)

Oct 19, 2012
JDimon:
carlfox:
Asatar:

We may never know the true reasons (Boardroom coup? Salary arguments? First rat off a sinking ship?) but we can nevertheless examine his legacy.
<!=break>

It was a boardroom coup, I went to high school with the son of the member of the board and was able to speak to him for a little while earlier today. He said that the board and Pandit had opposite views on the future of the company and neither wanted to budge. Basically Corbat had more backing and shared the views of a majority of the board on the future of citigroup.

Very cool to know - thanks for sharing.

Would you mind posting some any additional details you have on it, or how you got the information (to help assure us you're not trolling, haha)

I've said basically everything I know. It was an extremely brief 5 minute conversation. My high school is having a networking/alumni event this weekend and he assured me we could talk more at the event. I will post anything I find out at the event this weekend.

"The way to make money is to buy when blood is running in the streets."

-John D. Rockefeller

Oct 18, 2012

maybe the scent of vindaloo was too much.

Oct 19, 2012
wannabeaballer:

maybe the scent of vindaloo was too much.

lol

I'm not concerned with the very poor
-Mitt Romney

Oct 18, 2012

Given the aforementioned, I think it will be telling to see what his exit compensation looks like. Takes nothing, it looks like a resignation through and through. Collects a portion of the $33M his compensation that's due throughout the next few years, it could mean a few things. It's too spotty to know for sure, but these next few weeks will be telling

Oct 24, 2012

Do you all think there is a serious possibility of UBS splitting off their North American IBD and refocusing exclusively on their wealth management business?

If so, who would buy a UBS ibanking division?

Oct 24, 2012
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