[ by Melanie Gretchen ]

Citigroup may be entering a new era, in which banking is king, and the brokerage business is – well – not.

The appointment of Michael Corbat as CEO, to replace Vikram Pandit, seems primed to prompt a change of direction.  Mr. Pandit is a Wall Street veteran whose experience as a hedge fund manager earned him a reputation as a big-picture, strategic thinker.  What he did during his 5-year rule was turn Citi into a brokerage powerhouse, out of the financial crisis right through better-than-expected Q3 results. 

In contrast, Mr. Corbat is a banker whose experience as head of the legacy holding makes him equipped to deal with his firm's recent disappointing returns – and focused on the banking business.  As chief of the firm of which he is a 30-year veteran, Mr. Corbat has an ally in bank chairman Michael O'Neill, also a banker, who clashed with Mr. Pandit.  What Mr. Corbat and Mr. O'Neill share is a focus on the nitty-gritty of the business, i.e. the small details.  Add Mr. Pandit's uneasy relationship with regulators, and Mr. Corbat may be the right pick for what he is not, in addition to what he is.

Mr. Pandit might not have had this in mind when he spoke of getting Citi back to the basics of banking – but it may be where Citi is going.  Given shareholders' voting down Mr. Pandit's 2011 pay package, a new way may be the only way.

For further details, go to [WSJ, 10/17/12].