Bad luck Chuck

4 November 2007 By Rob Cox Follow @rob1cox

Chuck Prince took over amid regulatory tumult, but gave the impression he hadn t mastered Citi s complexity. The bank needs a confidenceinspiring leader unwedded to Sandy Weill s legacy of expansion, with an understanding of the waterworks of finance, like John Thain, and a willingness to take them apart.

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Charles Prince has resigned as chief executive and chairman of Citi. Former US Secretary of the Treasury Robert Rubin was named acting chairman. Sir Win Bischoff will be interim chief executive. Citi to take $8bn to $11bn in additional writedowns.

In a statement, Prince said: "It has been my privilege to lead this powerful diversified financial services company for the past four years and to be affiliated with the directors, shareholders and employees of Citi and its predecessor companies for the past 29 years. I am proud of the significant progress we have made in rapidly building and expanding the scope of our businesses internationally, strengthening our businesses domestically, and restoring excellent relationships with our regulators throughout the world."

The bank also said due to significant declines since September 30 in the fair value of the approximately $55bn in US subprime related direct exposures, the reduction in revenues attributable to these declines ranges from $8bn to $11bn.

Citi said: "These declines in the fair value of Citi's subprime related direct exposures followed a series of rating agency downgrades of subprime US mortgage related assets and other market developments, which occurred after the end of the third quarter. The impact on Citi's financial results for the fourth quarter from changes in the fair value of these exposures will depend on future market developments and could differ materially from the range above."

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