Citigroup shuffles execs; former CFO Gary Crittenden is leaving

Citigroup Inc. said today that its former chief financial officer and current chairman of Citi Holdings, Gary Crittenden, is leaving the company as part of the bank's latest shuffling of management.

Citigroup Inc. said today that its former chief financial officer and current chairman of Citi Holdings, Gary Crittenden, is leaving the company as part of the bank’s latest shuffling of management.

Crittenden took over as chairman of newly created Citi Holdings in March after the New York-based bank separated some of its riskier assets from more traditional banking operations, which became known as Citicorp.

“Clearly there’s some instability in the executive management,” said Jason O’Donnell, a senior research analyst at Boenning & Scattergood Inc. “That’s a reflection of the fundamental state of the company.”

Citigroup has been among the hardest hit banks by the credit crisis and ongoing recession. Pressure has been mounting on the bank and its CEO, Vikram Pandit, to return the bank to profitability and improve operations. Citigroup has received $45 billion in aid from the government since last fall, part of which is being converted to a 34 percent equity stake in the bank.

While the government might not have forced the latest changes, as one of the biggest investors in Citigroup — on behalf of taxpayers — it is probably keeping close watch on the moves.

“I wouldn’t expect them to have a hand in this transition right now, or with these moves, because ultimately it’s at a level that they shouldn’t have a say on,” Alois Pirker, a senior analyst at Aite Group said of the Treasury’s role in the latest moves. “At the same time, I could see them getting nervous.”

Those worries are likely to put added pressure on Pandit because he is ultimately responsible for stabilizing the management, which is vital to the bank improving its operations, Pirker said.

“If changes continue to happen, then it reflects badly on him,” Pirker said of Pandit.

Ultimately, continued turnover and an inability to return to stable profits could cost Pandit his job as the government becomes a major stakeholder and exerts more influence on the bank, said O’Donnell of Boenning & Scattergood.

Citigroup has been undergoing a plenty of changes in its management ranks over the past year as it shuffles executives to different roles and others leave to pursue different opportunities. Citigroup also saw multiple board members leave earlier this year ahead of the bank’s annual meeting.

Both Crittenden and Edward Kelly switched positions as recently as March before the newest changes.

On Thursday, Kelly, 56, was named vice chairman of Citigroup. He had been serving as CFO since March when Crittenden took over as chairman of Citi Holdings. In his new position, Kelly will take on responsibilities for strategy and mergers and acquisitions in the new position.

“It’s a little bit surprising,” Kelly changed roles so quickly, O’Donnell, said. “It doesn’t seem to be enough time to give a CFO a chance.”

Crittenden, 55, is leaving the company to spend more time with his family and pursue other business interests, Citigroup said in a statement.

John Gerspach will assume the role of CFO, becoming Citigroup’s third CFO this year. Gerspach, 56, previously served as controller and chief accounting officer at Citigroup.

Also, Citigroup has hired Eugene McQuade to serve as CEO of Citibank NA, its primary banking subsidiary. McQuade, 60, most recently served as vice chairman of Merrill Lynch and president of Merrill Lynch Banks. He left that position in February, a month after the New York-based investment bank was acquired by Charlotte, North Carolina-based Bank of America Corp.

Shares of Citigroup rose 3 cents to $2.65 in late morning trading.