Chuck Prince's timeline at Citi
Chuck Prince's former CEO-ship at Citi was marked by high hopes and heavy losses. The Citi he inherited had been built to tower over the the rest of the global financial services industry, but it did so only briefly before seriously testing the limits of manageability.
As CEO, Prince took on many difficult issues; the combination of the sheer size of the business, a series of high-profile scandals, high operating costs, and low share prices posed a tremendous challenge. The recent heavy losses in Citi's mortgage-backed securities business was finally enough for Prince to call it quits, when he elected to retire on November 4th 2007. Euromoney.com recounts the rollercoaster of events that marked his tenure at Citi, starting with Sandy Weill's decision to name Prince as future CEO in 2003.
WHEN CITIGROUP CHAIRMAN and CEO Sandy Weill announced last month that he was to hand over the role of CEO to Charles Prince, there was a slew of speculation from various interested parties. None, perhaps, was as wistful as that doing the rounds of Citi's Latin America bankers: is Chuck Prince Latin American at all?
Citigroup's vision of the ultimate financial company, manufacturing and selling every financial product, is lost. A series of scandals betrayed the fact that the structure Sanford Weill built had reached the limits of its manageability. Charles Prince now has a new plan to put the bank back on track. Will it work?
"Citigroup is still a fantastic institution. It wins more of our Awards for Excellence around the world than any other firm. But today it is less than the sum of its parts. Chuck Prince desperately needs to show he has the leadership skills to make the numbers add up again. "
More than 50% of Citigroup’s corporate and investment banking revenues come from outside north America, so emerging markets are the cornerstone of its success or failure. It already dominates some areas but can it blow the competition away in every product and in every region?
From April 18 Chuck Prince will be both chairman and CEO of Citigroup. What he might need to do is to tear down the massive edifice that Sandy Weill built.
At the start of April, Chuck Prince, chairman and CEO of Citigroup, came to Riyadh to lobby the Saudi finance ministry, central bank and capital markets regulator to let the US firm back into the kingdom less than two years after Citigroup sold off its 20% stake in Samba (previously Saudi American Bank). It was one of the early big decisions of Prince’s tenure as CEO and signalled the end of Citigroup’s presence in a country where it had operated since 1955.
At a time when M&A volumes are rising, a toughening up of the CFIUS could deter foreign companies looking to buy in the US. And that would take a serious chunk out of Wall Street’s fees.
20 July: Monica Wong; Awards for excellence; Reich's KFW farewell
Abigail Hofman July 2006
Apples and shuffles
Abigail Hofman November 2006
"Citigroup, America’s largest banking group, reported mediocre third-quarter results in mid-October. Net income was down by 23%, year on year. “Results from our capital markets-related businesses fell short of my expectations,” admonished chairman and chief executive, Charles Prince. Some say that when Chuck and Sallie appear on the podium together at investor presentations, it’s like witnessing a husband and wife chat show. And the dynamic duo have much to chat about because the hereditary Prince is on the warpath."
Abigail Hofman December 2006
"Recently, Citigroup has also been having trouble with its trading profits. Third-quarter results were dragged lower by weaknesses in commodities, interest rate products and foreign exchange. Chief executive Chuck Prince harrumphed: 'Results from our capital markets-related businesses fell short of my expectations.' "
Euromoney January 2007
Citigroup demands a much greater degree of attention than almost any other financial institution. At times, Chuck Prince must wish it didn’t. But such scrutiny is justified.
“The share price hasn’t moved for a decade. Working for Citigroup has put an extra five years onto my working life. You make a pact with the devil when you work for an investment bank, I know, but you at least expect him to keep his side of the bargain!”
- One disgruntled Citigroup banker bemoans having his retirement plans indefinitely delayed. Off the record, January 2007
The Champions League of investment banking:
Euromoney February 2007
Which managers are under pressure? The CEOs of two of the three largest institutions in our survey, Chuck Prince of Citigroup and Jamie Dimon of JPMorgan Chase, will not find our ‘value added’ statistics happy reading.
Abigail Hofman February 2007
"...One man who won’t be back shortly – or not to his Citigroup desk anyway – is Todd Thomson. Todd used to head the bank’s wealth management unit. Announcing Todd’s departure in late January, Citi’s chief executive, Chuck Prince, barked at reporters that Todd was off “because Sallie [Krawcheck] is taking his job.” In fact this turned out not to be the whole story."
"Central America’s promise as a nascent marketplace close to the US and the reality that there are no easy purchases in big markets such as Mexico or Brazil mean that HSBC and Citigroup are willing to work hard to grow. "Target acquisitions are absolutely what we want to do and these are perfect examples of what we have done [in 2006]," says Citigroup chairman and chief executive Chuck Prince. "We’ve done that with Grupo Uno, we’ve done that with Banco Cuscatlán," he adds."
People & markets: Citi to select alternatives head
Euromoney April 2007
Citigroup CEO Charles Prince said in March that he hoped that the vacant position of head of the group’s alternatives business (CAI) would be filled within weeks. It’s about time.
Abigail Hofman April 2007
"Some 17,000 employees will be expelled from the shelter of the big umbrella – although come to think of it, hasn’t the red umbrella logo also gone? Note to Chuck: I hope you received a good price for the umbrella as it’s the only part of the Citigroup brand clients can identify with."
HOT OFF THE PRESS
Abigail Hofman May 2007
"Does the mighty Chuck Prince, Citi’s chief executive, read the ‘Abigail with attitude’ column?...Size does not matter anymore; it’s performance that counts."
Abigail Hofman May 2007
"For some weeks now, I have been highlighting the fact that Chuck Prince is a sitting duck – although ostrich might be a better choice of bird for activist hedge fund managers. It seems that alternative investor Eddie Lampert agrees. He has purchased an $800 million stake in Citigroup through his vehicle, ESL Investments. I do hope Lampert will write an “open letter” to Prince so we can all be spectators at the ensuing bullfight."
Abigail Hofman July 2007
"Prince’s fate,” a mole whispers, “is inextricably linked to the share price: SP down, CP out; it’s as simple as that.”"
"News emerges of a conference call this morning between Fed officials and the CEOs of leading financial institutions including Bank of America’s Ken Lewis, Citi’s Chuck Prince, JPMorgan’s Jamie Dimon and Lloyd Blankfein of Goldman Sachs. In the days ahead, the Fed will press the country’s leading banks to make use of this facility even if they don’t face a funding emergency, in an effort to remove the stigma associated with drawing on it. Of course, this fools no one."
"'I have asked Lew Kaden, vice-chairman, to spend more time working closely with me on major strategic opportunities and key issues," said Prince in an internal memo in September. "
"While others such as Jimmy Cayne at Bear Stearns and Chuck Prince at Citi hang on for dear life, Merrill Lynch CEO Stan O’Neal has been forced to bite the bullet."
"They danced with some good-looking girls but they danced with some ugly ones as well"
- An investment banker describes Citi’s recent leveraged finance transactions, expanding on former CEO Chuck Prince’s July comment that the US bank was "still dancing" in the buyout market just before the boom came to an end. Quotes of the crunch, November 2007
Abigail Hofman November 2007
"The man who looks most precarious now is Chuck Prince of Citi."