UPDATE 2-Citigroup shakes up management, Maheras to leave

viernes 12 de octubre de 2007 05:51 CEST
 

(Adds background, analyst comment)

By Dan Wilchins

NEW YORK Oct 11 (Reuters) - Citigroup Inc (C.N: Cotización), which last week forecast 60 percent declines in third-quarter earnings amid bad debt losses, said it was promoting Vikram Pandit to head banking, markets, and alternative investments, and that trading head Thomas Maheras was leaving.

Randy Barker, one of Citi's three heads of fixed income, will also leave the company, Citi Chief Executive Charles Prince said in an interview. Citi said last week that it expects $3.3 billion of losses and write downs from its securities and banking areas.

Maheras' departure leaves Citi with one less senior manager to potentially fill the chief executive spot if Prince leaves. Citi's warning last week left some investors calling for Prince's ouster.

The changed structure may not fix much at all, said Thomas Russo, partner and portfolio manager at Gardner Russo & Gardner in Lancaster, Pennsylvania, which owns Citi shares.

"Clearing the bench may be therapeutic, but it doesn't necessarily improve Citi's ability to fix the mistakes that were made or seize opportunities in these markets," Russo said.

Citi's shares had risen 2.5 percent on Thursday before the management change was announced, to close at $48.32 on the New York Stock Exchange. The rise came amid rumours that Prince was leaving the bank, said Peter Kovalski, portfolio manager at Alpine Woods Capital Investors, which owns Citi shares.

Shares of Citi, the largest bank in the U.S., have still fallen more than 13 percent so far this year, performing worse than the Philadelphia KBW Bank index's 7.45 percent decline.   Continuación...