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Citigroup may select new chief executive next week

"They need to get a leader in there and it has to happen soon."

William Fitzpatrick, Johnson Asset Management analyst

Citigroup Inc's board may choose a replacement for former CEO Charles Prince at a meeting set for next week, a person familiar with the matter said.

The board will discuss candidates to run New York-based Citigroup at a previously planned two-day meeting starting tomorrow, the person said on Friday.

The board may decide to delay a decision, the person said. Vikram Pandit, 50, who oversees Citigroup's trading, investment banking and alternative-investing units, is a leading candidate for the job, the person said.

Citigroup's board is under pressure to find a candidate who will reverse the biggest US bank's sliding stock price and stem losses from mortgage holdings.

The shares have fallen 9.1 percent to US$34.31 since Prince's ouster, and the 38 percent drop this year on the New York Stock Exchange makes Citigroup the worst performer in the Dow Jones Industrial Average, which has advanced 9.3 percent.

"They need to get a leader in there and it has to happen soon," said William Fitzpatrick, financial-services analyst at Johnson Asset Management in Racine, Wisconsin, which oversees US$1.7 billion, including about 500,000 Citigroup shares.

Time Warner Inc CEO Richard Parsons has led a committee of directors seeking the bank's next CEO since Prince left on Nov. 4. Other members include Robert Rubin, the bank's interim chairman and former US Treasury secretary who joined Citigroup as a senior executive in 1999; Alain Belda, chairman of Alcoa Inc; and Franklin Thomas, former CEO of the Ford Foundation.

Prince stepped down after the bank said investments linked to subprime mortgages had fallen by at least US$8 billion in the fourth quarter, putting the bank on course for its first loss since 1991.

Losses and writedowns on subprime mortgage investments and high-yield corporate debt toppled CEOs at Merrill Lynch & Co, UBS AG and E*Trade Financial Corp, while Morgan Stanley and Bear Stearns Cos sacked No. 2-ranked executives.

Subprime mortgages are given to borrowers with the weakest credit and overdue payments in the third quarter were the highest in about a decade, the Mortgage Bankers Association reported.

Pandit joined Citigroup last July when Prince bought out his year-old hedge fund for US$800 million.

Before that, Pandit was at Morgan Stanley for 22 years.

Citigroup's board meeting was reported earlier by Dow Jones Newswires.
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