Hit by poor investments, CEO of Citigroup resigns
The company's stock fell about 20 percent in his four years in charge.
Published November 5, 2007
NEW YORK - Citigroup Inc. chairman and chief executive Charles Prince, beset by the company's billions of dollars in losses from investing in bad debt, resigned Sunday and is being replaced as chairman by former Treasury Secretary Robert Rubin.
The nation's largest banking company announced Prince's widely expected departure in a statement following an emergency meeting of its board.
Citi also said Sir Win Bischoff, chairman of Citi Europe and a member of the Citi management and operating committees, would be interim CEO.
Rubin, a former co-chairman of Goldman, Sachs & Co., has been the chair of Citi's executive committee, and it was expected he would take a greater role in leading the company.
In a separate statement, Citi, which took a hit of $6.5-billion from asset writedowns and other credit-related losses in the third quarter, said it would take an additional $8-billion to $11-billion in writedowns.
"It was the honorable course, given the losses we are now announcing," Rubin said of Prince's resignation.
Prince joined former Merrill Lynch & Co. CEO Stan O'Neal, who resigned from the investment bank last month, as the highest-profile casualties of the debt crisis that has cost billions at financial institutions.
Prince, 57, became chief executive of Citigroup in October 2003. Shares closed Friday at $37.73, about 20 percent below where they were when he started.
Prince's position looked especially shaky after the company estimated on Oct. 1 that third-quarter profit would decline 60 percent to some $2.2-billion, after seeing nearly $6-billion in credit costs and writedowns of overly leveraged corporate debt and souring home mortgages. At that time, Prince said the bank's earnings would return to normal in the fourth quarter.
But when Citigroup released third-quarter results two weeks later, writedowns and credit costs exceeded $6-billion, and chief financial officer Gary Crittenden indicated the outlook wasn't as upbeat as Prince had predicted.
[Last modified November 5, 2007, 00:54:24]
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