BUSINESS

Vikram Pandit Resigns: Citigroup CEO To Be Replaced By Michael Corbat (UPDATE)

10/16/2012 08:20 am ET | Updated Oct 16, 2012

Vikram Pandit is resigning as CEO of Citigroup, the company announced in a press release Tuesday. He will be replaced by Michael Corbat, previously the bank's CEO of Europe, Middle East and Africa.

News of Pandit's resignation comes as a shock to many, since The Wall Street Journal reported only in August that Pandit was expected to stay in the position for the foreseeable future. Many in and around the finance industry have expressed similar surprise, including CNBC host Jim Cramer, who said Tuesday that the news came as "a complete shock."

(This post has been updated to include subsequent revelations.)

Pandit didn't exit quietly, according to news reports. The Wall Street Journal tweeted Tuesday morning:

Bloomberg later tweeted:

But Pandit later denied that he was forcibly ousted from Citi during a discussion with Bloomberg TV's Erik Schatzker, saying that he "wouldn't have [resigned] unless I thought it was the right time." Pandit additionally said there was little he would have done differently in retrospect.

The company's Chief Operating Officer John P. Haven is also stepping down, according to the release. Pandit's full statement via Businesswire:

“Thanks to the dedication and sacrifice of people across Citigroup, we have emerged from the financial crisis as a strong institution. Citigroup is well-positioned for continued profitability and growth, having refocused the franchise on the basics of banking. Given the progress we have made in the last few years, I have concluded that now is the right time for someone else to take the helm at Citigroup. I could not be leaving the Company in better hands. Mike is the right person to tackle the difficult challenges ahead, with a 29-year record of achievement and leadership at this Company. I will truly miss the wonderful people throughout this organization. But I know that together with Mike they will continue to build on the progress we have made.”

Citigroup shares rose 1.7 percent early Tuesday morning on news of Pandit's resignation, Reuters reports.

More from the Associated Press:

Vikram Pandit stepped down as CEO of Citigroup on Tuesday after steering the bank through 2008 financial crisis and the choppy years that followed.

Pandit's replacement as CEO is Michael Corbat, the current CEO of Citigroup's Europe, Middle East and Africa division, the bank said. Corbat has worked at Citigroup and its predecessors since he graduated from Harvard in 1983, it said.

Pandit will also relinquish his seat on Citi's board of directors. And a second top executive also resigned as part of the shake-up: President and Chief Operating Officer John Havens, who also serves as CEO of Citi's Institutional Client Group.

The change is effective immediately. The bank offered no explanation for the sudden departure of its two top executives.

On Monday, Citigroup announced third-quarter earnings that beat analysts' expectations, after stripping out one-time items like a big write-down it had to take because it got less money than it had hoped when it negotiated to sell its stake in its retail brokerage.

Investors were pleased with the results and sent the stock up more than 5 percent Monday, rising $1.91 to close at $36.66.

Pandit, 55, said in a statement that "now is the right time for someone else to take the helm at Citigroup" after the bank "emerged from the financial crisis as a strong institution."

Pandit joined Citigroup in 2007 when the hedge fund he founded was acquired by the bank. He quickly rose to CEO in December 2007. Earlier, he had ascended to head of investment banking at Morgan Stanley before leaving in 2005 to form the hedge fund.

A native of India, Pandit attended Columbia University at 16 and completed a bachelor's degree in three years. He earned a doctorate in finance in 1986.

Pandit faced harsh criticism after Citigroup took $45 billion in government bailout money in the 2008 credit crisis. It is widely believed that other, stronger banks were forced to take billions in bailout money to divert attention from Citigroup, whose financial situation was more precarious.

The U.S. Treasury sold the last of its stake in the company in December 2010.

Check out the reactions from Twitter below:

Twitter Reactions To Vikram Pandit's Resignation

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