Citigroup chief Pandit stuns Wall Street by quitting

Vikram Pandit abruptly stepped down from the helm of Citigroup yesterday after a boardroom clash at the top of the third-largest US bank.

Only 24 hours earlier, the mild-mannered 55-year-old had unveiled forecast-beating results, with Citigroup saying it had made more money from trading bonds and boosted profits from lending. But, as the market cheered the figures, there was no hint that the man who had led the banking giant through the worst financial cataclysm in living memory was hours away from walking out of the firm's Park Avenue headquarters.

In nearly five years at the top, Mr Pandit had endured both testing professional challenges and public opprobrium as one of the poster boys of Wall Street excess – including a high-profile, Congressional hearing in 2009, where, as one of eight bank chief executives summoned before lawmakers, he heard the Massachusetts Democrat Michael Capuano proclaim: "America doesn't trust you any more."

Mr Pandit's departure was announced by the Citi board, which said he had stepped down "effective immediately". His long-time associate and Citigroup's president and chief operating officer, John Havens, has also resigned.

The two co-founded the Old Lane hedge fund, which was bought by Citigroup in a deal that became the first step in Mr Pandit's ascent to the top of the banking giant.

The Indian-born financier became head of the firm's alternative-investments arm and, in one swift move, a leading candidate to succeed the-then chief executive Chuck Prince. He took over in December 2007.

"I have concluded that now is the right time for someone else to take the helm," Mr Pandit said.

Yesterday, the board said it had elected Mike Corbat, a Citigroup veteran to replace him.

Wall Street was dumfounded. "The timing of the move is shocking," said Adam Sarhan, chief executive of New York-based Sarhan Capital.

Speculation turned to the possibility of a dispute over pay, with some pointing to the bank's annual meeting in April, when shareholders rejected his $14.9m (£9.2m) 2011 pay package.

Citi's chairman, Michael O'Neill, said: "We respect Vikram's decision. Since his app-ointment at the start of the financial crisis until the present, he has strengthened our global franchise."