It appears Citigroup (C) CEO Charles Prince wants to give people something to talk about other than this quarters results Monday when results are released.
Late Thursday Citi announced a new corporate structure in which its investment banking operations and its alternative investments businesses will be merged. The new division will be run by Vikram Pandit, a former Morgan Stanley (MS) executive who joined Citigroup earlier this year when the bank bought his Old Lane hedge fund for $800 million. Mr. Pandit has been long considered a potential replacement for Prince and now appears one step closer to that office. Before joining Citigroup, Pandit ran Morgan Stanley's institutional securities business and was considered the top candidate to replace CEO Philip Purcell but he left in 2005, opting to set up his own hedge fund, Old Lane Partners.
Thomas Maheras, now former co-head of investment banking with responsibility for capital markets and trading, is leaving Citigroup. Mr. Maheras also had been considered a potential successor to Mr. Prince. It appears it is now a one horse race.
Investor have been clamoring for a shakeup at Citi for almost a year now and have finally got it. I believe this is the first of several move which will lead to the weary Prince's unforced departure early next year. When Prince took over Citi was a mess and it heaps of trouble both here and abroad. Prince solved those issues and got Citi back on solid footing but he has taken the banking giant as far as he can.
This is a good move and the start of what investors have been clamoring for... new leadership