Citi Shuffles Executives in Restructuring Efforts
Citigroup Inc. (C) announced Friday it will move Gary Crittenden from the role of chief financial officer of Citi to chairman of Citi Holdings, the branch the bank plans to split off from its core business. In the new role, Crittenden will work to "optimize the value of the businesses" of the unit, which represents a significant portion of Citi's assets, bank officials said in a media statement. Before joining Citi as CFO in 2007, Crittenden worked seven years as executive vice president, CFO and head of global network services at American Express Co. (AXP). The former head of global banking at Citi, Edward Kelly, will assume Crittenden's old role as CFO of Citigroup. Before joining Citi Alternative Investments in February 2008, Kelly worked as a managing director at the private investment firm The Carlyle Group. He had worked in various roles at Mercantile Bankshares Corp. for six years until it was acquired by The PNC Financial Services Group (PNC), which kept Kelly as vice chairman. Kelly didn't stay long after the March 2007 acquisition; he left for Carlyle months later in July 2007, according to Citi officials. "Gary and [Edward] will build on our early accomplishments and help to meet our strategic objectives at Citicorp and Citi Holdings," said Citi CEO Vikram Pandit. On Jan. 16, the bank announced, after posting a staggering $18.7 billion year-end loss for 2008, that it would split into two branches, essentially undoing the '98 merger between Citicorp and Travelers Group. The bank said in January it plans to unwind its non-core business in the Citi Holdings branch, which will take on brokerage and asset management, local consumer finance, and a special asset pool covered by the government loss-sharing agreement. These non-core businesses “do not sufficiently enhance the capabilities of Citi’s core business, and in many ways compete for its resources,” officials said in a January press statement. While Citi Holdings will absorb many of the bank's losses, Citicorp will be a “relationship-focused” global and regional business and consumer bank. Pandit said in an internal memo obtained in early March that he was “disappointed” with recent stock prices — which briefly entered dollar territory — as they did not reflect the bank’s capital strength or earnings potential. Despite market behavior, Pandit said he was “most encouraged” with the strength of Citi’s business so far in 2009. The bank was profitable through the first two months of 2009, marking its best quarter-to-date performance since the third quarter of 2007, he said. Despite its negative media exposure in recent weeks, Citi reported to the U.S. Treasury Department that its total mortgage originations were up to $7.8 billion in January from $5.5 billion in December. According to a monthly lending report released in mid-March by the Treasury, Citi followed the popular trend of spiked refinance loan volume and declining new purchase loan volume from recent months. Citi posted $1.3 billion in refi originations in January from $858 million in December, and $278 million in new purchase mortgages in January from $489 million a month earlier. Write to Diana Golobay at firstname.lastname@example.org. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.