Citigroup on Friday named its current CFO, Gary Crittenden, as chairman of Citi Holdings, the firm's non-banking arm established to hold and manage $850 billion in bad assets covered under its arrangement with the federal government to guarantee some of Citigroup's losses.
Crittenden, 55, is the former American Express Co. CFO who joined Citigroup in March 2007. He will be replaced by global banking head Edward ''Ned'' Kelly, also 55, who joined the company in February 2008 from Carlyle Group, Citigroup said today in a statement.
Crittenden's replacement comes the same week that Citigroup nominated four new board members, including former US Bancorp CEO Jerry Grundhofer, in a government-induced shakeup after the Obama administration orchestrated the bank's third rescue attempt in five months. In January, the bank named former Time Warner Inc. CEO Richard Parsons to replace Win Bischoff as chairman. Long-term board member Robert Rubin also announced he won't stand for re-election. (See: Citigroup to induct 4 'professional' directors in board shake-up)
Crittenden will work with Mike Corbat, the interim CEO of Citi Holdings, which will have about 100,000 employees. Overall, Citigroup had about 323,000 employees at the end of last year, including staff of the remaining banking operations, who are being grouped under the name Citicorp.
Citigroup CEO Vikram Pandit is selling off units unrelated to his main banking and trading businesses to restore profit following last year's record $18.7 billion loss. On 16 January, Citi unveiled its decision to realign into two businesses, in effect reverting to running a banking business similar to its operations before Sandy Weill and his team turned the company into a "financial supermarket" over the last decade.
The new structure, Citicorp and Citi Holdings will leave the bank operating without the burden of billions of dollars of "toxic assets" - those assets accumulated during the mortgage bubble, mostly made up of bad home loans and various derivatives.
Citicorp includes Citigroup's institutional and retail banks, while Citi Holdings houses non-banking operations like Nikko Cordial Securities, Nikko Asset Management and Primerica Financial Services, as well as the Smith Barney stake.
Citigroup said at the time that the new structure will allow it, among other things, to "focus on driving the performance of its core businesses, and separately, on realizing value from non-core assets."
Kelly was president of Citigroup's alternative investments unit, in charged of boosting returns from private equity, hedge funds and real estate. Pandit headed that until October 2007, when former CEO Charles ''Chuck'' Prince combined it with trading and investment banking into the Institutional Clients Group. Prince promoted Pandit to head the unit, and John Havens took over as head of alternative investments.
Prior to joining Carlyle in July 2007, Kelly was vice chairman of PNC Financial Services Group Inc. following PNC's purchase of Mercantile Bankshares Corp. He was CEO of Mercantile from March 2001 through March 2007. He also held senior investment banking positions at what is now JPMorgan Chase & Co. and was a partner at the law firm of Davis Polk & Wardwell.
Kelly received a bachelor's degree from Princeton University and a law degree from University of Virginia School of Law.
Before joining American Express, Crittenden was CFO at Monsanto Co., Sears, Roebuck & Co., Melville Corp. and Filene's Basement Corp. He started his career as a consultant at Bain & Co. and spent five of his 12 years at the Boston-based firm abroad, mainly in Germany.
Crittenden has a bachelor's degree in management from Brigham Young University and a master's in business administration from Harvard Business School. He joined American Express in 2000.