If American analysts and investors were surprised when Sir Win Bischoff was made interim chief executive of Citigroup last month, his appointment as chairman of the troubled banking giant late on Tuesday raised even more questions.
The former chairman of Schroders, the venerable British merchant bank, was little known in the US before he stepped in to fill the shoes of Chuck Prince, the chief executive who left in early November in the wake of massive credit-crunch writedowns.
Citi says Sir Win's impressive performance during the five weeks the bank was looking for a new boss meant he was too good to lose. Clients loved him and colleagues were apparently wowed by his ability to make decisions promptly and courteously.
The 66-year-old has risen without trace to the top of what is commonly thought of as the world's biggest bank. In appointing Sir Win as non-executive chairman and Vikram Pandit, the former Morgan Stanley banker as chief executive, Citi has taken the highly unusual step for an American company of splitting the top jobs.
Was this a move towards a UK-style arrangement to ensure more independent oversight of Mr Pandit as he runs Citi's business? Critics have said Sandy Weill, who built the conglomerate in the 1990s, ran Citi as his own empire. After promising a new start, Mr Prince fired rivals regularly in the latter days of his term, leaving the bank with little succession planning.
Or was splitting the job an admission that running Citi, with 370,000 staff in more than 100 countries, was too big a job for Mr Pandit, who had never run a bank before and only joined Citi earlier this year.
Richard Staite, a US banks analyst at Atlantic Equities, said: "It is positive that they have split the roles for all the reasons that the UK has adopted that model. It raises the question of whether Vikram Pandit is capable of taking on both jobs or whether Win Bischoff has more experience of operating in Europe and international markets."
Running Citi is certainly a big job. Its businesses range from basic retail banking to the rocket science of structured credit. It was growth in this once-booming area that forced the exit of Mr Prince. After Mr Prince's departure, Citi announced that its write-downs from sub-prime products would be up to $11bn, more than wiping out all the money it had made from packing and selling the toxic products to investors.
Sir Win is thought of as a British banker, but the son of a German businessman spent his early years in Cologne and Dusseldorf before moving to Johannesburg in 1955 unable to speak English. After taking a bachelor of commerce degree at the University of Witwatersrand, he worked for a time at Chase Manhattan Bank in New York before joining Schroders in London in 1966.
He worked his way up to become chief executive of Schroders by 1984. In 2000, by which time he was chairman, he orchestrated the sale of Schroders' investment bank to Citigroup for $2.2bn.
Having developed a perfect English accent and the gravitas expected of a City grandee of the old school, Sir Win has wowed Citi and its clients in New York. But is Sir Win the right man to oversee Citi as the company tries to get out of its hole?
Richard Bove, managing director at Punk Ziegel & Co, said he agreed with the job split because it would stop the board being pushed around by Citi's chief executive, but he added that Citi should have installed people at the top who understood retail banking, which accounts for about three-quarters of the group's profit. "The board runs the company by headline," he added.
"The guy is, in my view, fairly accomplished and was very capable of doing the job he had at Schroders and he probably did a pretty good job at Citigroup Europe. Do I think he should be chairman of Citigroup? Not in your wildest dreams," Mr Bove said.
Citi was created in 1998 when Mr Weill's Travelers Group bought Citicorp to form a massive financial conglomerate. But the company has faced repeated calls for a break-up in recent years as costs ran out of control, earnings disappointed and a series of mishaps cast doubt on anyone's ability to run a financial company so large and disparate. Mr Pandit has promised a root-and-branch review to make the bank more productive.
Mr Staite argues that a break-up could destabilise the company and that the businesses that are easiest to sell, such as private banking and the valuable Asian operations, are the ones Citi should keep. As chairman, Sir Win's fundamental task is to decide what Citi is really for.Reuse content