[ by Howard Haykin ]

Shock and Awe Surprise Follows Resignation - Analysts Now Try and Fill in the Blanks.

Initial reactions of analysts and investors - most assuredly based on personal conjecture -  reflect the industry's expectation that, sooner or later, Vikram Pandit would depart his post as Citigroup Chief Executive Vikram Pandit.  The timing and the immediacy of the move, along with what has not yet happened is what intrigues people on the Street the most. 

Tuesday morning's statement from Citi Chairman Michael O'Neill reported that Michael Corbat, previously chief executive for Europe, Middle East and Africa, would succeed Pandit as CEO and become a board member.  Citi President  (COO, according to Reuters) John Havens - a long-time associate of Pandit, also resigned.

Here are some initial reactions:

ANTHONY POLINI, ANALYST, RAYMOND JAMES - 

• "The announcement of Corbat is a big plus for the company: he has great leadership capabilities. I think he will probably be in a better position to get regulatory approval for the return of excess capital." 
• "I think Vikram has some regulatory baggage. I don't think he was very liked by the regulators. I think they, for whatever reason, had some disagreements."

MARTIN MOSBY, STOCK ANALYST, GUGGENHEIM SECURITIES

• "If it was a natural transition of any sort, the timing would not be now. You would announce it in January and you would set up a transition period that would be completed in probably April."
• "What didn't happen is that the [CFO] is not resigning, so that says it wasn't related to the financials."
• "There is probably an underlying difference between Pandit, and Havens, and the board."

MIKE HOLLAND, CHAIRMAN, HOLLAND, NEW YORK, OVERSEEES >$4bn OF ASSETS

• "It's not a shock that he's no longer there, but the surprise is, this is all happening very quickly. Why is he leaving immediately? Normally you have a transition period. And Havens is gone too. I'm not a Citi shareholder, but if I were, I'd be disappointed that Havens is gone, in some ways more than Pandit."

ADAM SARHAN, CEO OF SARHAN CAPITAL, NEW YORK

• "The timing of the move is shocking. Why they didn't announce it with the earnings is a question that needs to be answered. But Pandit is leaving at the top of his game and leaving the company in great hands. As an investor, my only question is with the timing. "

GAUTAM DHINGRA, CEO AND FOUNDER, HIGH POINTE CAPITAL MANAGEMENT, CHICAGO

• "Our outlook on Citigroup is positive. We are positive on banks in general and more so on Citibank because of the higher potential reward.
• "As to Pandit's resignation, we are scratching our heads. Our view has always been that he was not really adding much value. So, in that sense we are not sorry to see him leave.
• "However, the abruptness of the resignation does cause a bit of worry. Why did it have to be an abrupt, rather than a graceful exit?"

JEFF HARTE, EQUITY RESEARCH ANALYST, SANDLER O'NEILL, CHICAGO

• "I think Vikram had them on the right path strategically so I am disappointed for him."
• "I don't get the impression there are significant underlying issues driving this. I think this is more the board reacting to the share price and wanting a more hands-on manager in the CEO position."

MATT MCCORMICK, BANKING ANALYST & PORTFOLIO MGR  AT BAHL & GAYNOR, CINCINNATI, OH

• "Pandit struggled to get an identity for Citigroup and I would say ultimately he was unsuccessful in having people know what Citigroup stands for and what it does."
• "He was not beloved by Wall Street. He was the accidental president. He was thrust into that position- he's a hedge fund guy."
• "What Pandit and Havens did was increase the uncertainty around Citi. There's a perpetual cloud of uncertainty surrounding Citigroup. There's always turmoil. . .that's had to affect the (stock) price."

PETER JANKOVSKIS, C0-CIO, OAKBROOK INVESTMENTS, LISLE, IL

• "Interesting, and after the stock reported pretty good numbers yesterday, I'm surprised.
• "It does seem strange to me that someone would step away after reporting better-than-expected numbers and certainly do a lot to reconfigure the company for going forward. I would have expected he wanted to stay around and see some of the fruits of his labors there."

[ Reuters, 10/16/12 ]