WASHINGTON: The world’s biggest bank – Citigroup – named ex-US treasury chief Robert Rubin as its new chairman last Sunday, replacing Charles Prince, who retired after its poor performance in the subprime mortgage crisis.
“We have made strong progress in our strategy for building for the future, evidenced in the momentum we have achieved in most of our businesses,” Prince was quoted as saying in a company statement.
“Nevertheless, it is my judgment that given the size of the recent losses in our mortgage-backed securities business, the only honourable course for me to take as chief executive officer is to step down.”
Prince was also chairman.
Rubin, the influential chairman of the company’s executive committee, was named the new chairman, while Sir Win Bischoff, chairman of Citi Europe, would become interim chief executive, the company said.
Prince will continue to serve the company as an adviser while a permanent replacement is found.
His departure came less than a week after that of Merrill Lynch chief Stanley O’Neal. His bank has taken the worst hit from the subprime crisis.
“I intend to work closely with the board, Win, and the operating and executive leadership to maintain the momentum of our business,” Rubin said in the statement.
“We will continue to focus on taking the steps necessary to help our employees realise their full potential, serve our customers with distinction, and build superior value for all of our shareholders.”
Like some of its rivals, Citigroup’s balance sheet has been hit by losses from its exposure to mortgage-backed securities, which have been ravaged by the housing downturn. – AFP
Citigroup revealed losses of US$1.56 billion (K4.59 billion) from bets it made on mortgage-backed securities and other loan instruments, as well as disclosing pre-tax write-downs of US$1.35 billion (K3.97 billion) related to mergers and acquisitions lending agreements. - AFP