George S. May Business Blog

FDIC calls out Citi’s upper-management

The Wall Street Journal cited in a report today that the Federal Deposit Insurance Corp. is reportedly pressing for a management shake-up at the beleaguered bank Citigroup Inc., putting CEO Vikram Pandit in the hot seat.

While a spokesman for the FDIC declined to comment, Citi’s Chairman, Richard Parsons, denied the possibility of such a move:

“We are confident in our management and confident that we will continue to position Citi for a return to sustained profitability,” said Parsons in a statement e-mailed to The Associated Press.

Citigroup has been one of the most troubled banks throughout the financial crisis. Investors have long criticized its board and management for allowing the bank to make big investments in the risky housing market leading to Citigroup reporting billions in losses.

Citigroup has already received $45 billion in government rescue funds, and a portion of that will soon be converted into common shares, making the Treasury Department its largest shareholder.

Last month, the government determined that it would need to raise an additional $5.5 billion as a buffer against future losses.

“We went through a rigorous stress test process, the results of which were agreed to by appropriate regulatory agencies and clearly reflect the significant progress made by this management team over the last 15 months to turn Citi around,” Parsons said in Friday’s statement.

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