Page last updated at 16:35 GMT, Monday, 17 November 2008

Citigroup boss shows his mettle

By Katie Hunt
Business reporter, BBC News

When Vikram Pandit took the top job at Citigroup in January this year he said that "nothing was off the table".

Vikram Pandit
Citigroup has made the heaviest jobs of any financial firm.

"I will undertake an objective and dispassionate review of all the businesses," he said back then.

He was true to his word.

On Monday, Citigroup revealed plans to cut 52,000 jobs by early next year, Mr Pandit's most dramatic move yet to return the bank to profitability and shore up the bank's struggling share price.

They come on top of 23,000 jobs eliminated already in 2008 and mark the most aggressive cuts by any financial services company since the onset of the global credit crisis.

Staggering losses

Citigroup has suffered huge losses of more than $20bn, hurt by bad debts and write-downs on assets hit by the turmoil in credit markets.

Its share price had fallen by almost 70% this year and now trades at about $9.

Citibank was founded in 1812 in New York
It has 200 million customer accounts
Operates in 100 countries

The bank has received $25bn as part of the US Treasury's bank bail-out programme and some analysts say that the bank might not be profitable before 2010.

Mr Pandit has come under fire for failing to turn around the bank's fortunes.

Citigroup's failure to acquire Wachovia, which bought was by rival Wells Fargo after a bitter dispute last month, underscored the concerns about the bank's leadership.

The bank's board was forced to issue a letter of support for the company's chairman Sir Win Bischoff after the Wall Street Journal reported that he had lost the board's confidence.

Meteoric rise

Before his appointment Mr Pandit, 50, had never run a public company, let alone one as big and complex as Citigroup.

He also had no experience in running consumer banking, which generates more than half of Citigroup's overall revenue.

"There was some hope that somebody with a bigger name would be chosen, so maybe from that perspective, there is some disappointment," said Lee Delaporte, research director at Dreman Value Management, shortly after his appointment.

Born in Nagpur, India, Mr Pandit came to the United States when he was only 16 for undergraduate studies at New York's Columbia University.

Citigroup branch in Washington DC.
Like many other US banks, Citigroup has been hit hard by the credit crisis.

The son of an Indian businessman, he earned a bachelor's degree and a master's degree in electrical engineering before switching to finance and completing a PhD.

In 2005, Mr Pandit left Citigroup rival Morgan Stanley after 22 years.

He founded his own hedge fund, Old Lane, then sold it a year later for about $800m to Citigroup, which was keen to build up its executive ranks after a string of departures.

He was with Citigroup for just five months before being elevated to the top job.

Low key

For some, Mr Pandit's low-key, cerebral approach was a welcome counterpoint to his more charismatic predecessor Charles Prince, who resigned abruptly in November last year.

Under Mr Prince's watch, the bank was told by one of its biggest shareholders, Saudi Prince al-Waleed bin Talal, to take draconian measures to cut bloated corporate expenses.

The softly-spoken Mr Pandit told New York magazine earlier this year that he never got into "the Gordon Gekko idea of Wall Street".

And slashing costs will be the key message of his speech to employees in New York on Monday.

When Mr Pandit took the job at Citigroup's helm, many said he was taking on the toughest position in corporate America.

It seems clear that this is still the case.

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