Citigroup names investment banking head Pandit as CEO, Bischoff as chairman

NEW YORK — Citigroup Inc. named Vikram Pandit, the head of its investment banking business, as its chief executive officer Tuesday, charging him with restoring the bank's profitability and reputation after missteps in lending and investing left Citi with billions of dollars in losses this year.

The banking company named Sir Win Bischoff, who has been Citi's acting CEO, as its chairman.

Pandit, who ran a hedge fund bought by Citi earlier this year, is seen as a careful, decisive investment banker — qualities Citi needs following the ouster last month of Charles Prince and the revelation that Citi's writedowns of soured mortgages could amount to as much as $17.5 billion by the end of the year.

The appointments came after a two-day meeting of Citi's board.

Pandit is well known on Wall Street, having worked at Morgan Stanley for two decades until 2005, when he and a few other disgruntled colleagues left the brokerage and founded the hedge fund Old Lane Partners.

Earlier this year, Citigroup bought Old Lane for $800 million and put Pandit in charge of Citi's alternative investments. A few months later, Pandit took over the bank's markets and banking unit as well, and then reconfigured the business to mirror the Morgan Stanley structure he was familiar with.

His performance as Citi's leader will undoubtedly be scrutinized by investors until they see positive results — including his willingness to challenge the Citi strategy of the past several years. One question on Wall Street is whether Pandit will be beholden to the Citi board, which has remained steadfastly loyal to the Sanford Weill regime. Weill, a board member, built Citigroup through a series of mergers and acquisitions over the past few decades, and many have attributed the bank's failings this year to the Weill culture: Prince was his hand-picked successor.

Bischoff was the chairman of the British investment bank Schroders PLC, then joined Salomon Smith Barney Inc., a subsidiary of Citi, when it acquired Schroders. He began his current position in May 2000. He succeeds Robert E. Rubin, who temporarily filled the chairman's position after Prince's departure.

Unlike Merrill Lynch & Co., which took just two weeks to find a replacement for Stan O'Neal, its embattled CEO and another casualty of the mortgage crisis, Citi's search dragged on. Merrill's nab of John Thain, a Goldman Sachs alum who turned around the once-troubled New York Stock Exchange, eliminated him as a possibility for Citi.