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Citigroup CEO, President Resigns As Losses Pile Up

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By MADLEN READ, The Associated Press

Published: November 5, 2007

NEW YORK - Citigroup Inc. Chairman and Chief Executive Charles Prince, beset by the company's billions of dollars in losses from investing in bad debt, resigned Sunday and is being replaced as chairman by former Treasury Secretary Robert Rubin.

The nation's largest banking company announced Prince's widely expected departure in a statement after an emergency meeting of its board. Citi also said Sir Win Bischoff, chairman of Citi Europe and a Member of the Citi management and operating committees, would serve as interim CEO.

In a separate statement, Citi, which took a hit of $6.5 billion from asset write-downs and other credit-related losses in the third quarter, said it would take an additional $8 billion to $11 billion in write-downs.

Prince joined former Merrill Lynch CEO Stan O'Neal, who resigned from the investment bank last month, as the highest-profile casualties of the debt crisis that has cost billions at other financial institutions as well.

Prince, 57, became chief executive of Citigroup in October 2003. Many shareholders criticized him openly for much of his tenure, as Citigroup's stock lagged its peers while Prince executed what was called an umbrella model of corporate organization, with several separate lines of business.

Shares closed Friday at $37.73, about 20 percent below where they were when Prince became CEO.

Prince's position looked especially shaky after the company on Oct. 1 estimated that third-quarter profit would decline about 60 percent to some $2.2 billion after seeing nearly $6 billion in credit costs and write-downs of overly leveraged corporate debt and souring home mortgages. At that time, Prince said the bank's earnings would return to normal in the fourth quarter.

But when Citigroup released its third-quarter results two weeks later, the write-downs and credit costs exceeded $6 billion, and Chief Financial Officer Gary Crittenden indicated the outlook going forward wasn't as upbeat as Prince had predicted.

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