In the aftermath of the government agreement, Pandit got to keep his job (at least for the time being). However, none of that has stopped the press from speculating on who could replace him at the helm. Such names include American Express Co.'s CEO Kenneth Chenault.
Nonetheless, the speculation on Pandit's future may just be idle, given the firm's leading shareholder Saudi Prince Alwaleed bin Talal, who increased his stake to 5% from 4% last week, told CNBC he has confidence in Pandit and the executives of Citigroup.
"Vikram has just taken over this year, so for sure you cannot judge a CEO on this short tenure," he said. "I believe that the board and the previous CEO will have to take responsibility."
In the interview Alwaleed instead put the blame for Citi's troubles on:
- the Federal Deposit Insurance Co. for its failed deal with Wachovia Corp.;
- the Treasury for altering the Troubled Asset Relief Plan, which originally was created to write down bad assets by buying them;
- Former CEO Chuck Prince will take the blame for all of that risky investing including the decision to put $80 billion into an investment category that made investors finicky.
But how long before Alwaleed stops ignoring the peanut gallery's call for change? Pandit clearly is under pressure to take action, and now his time has come. He's in the spotlight. He's the CEO, and it means a whole lot besides a payout and a golden parachute. It means keeping shareholders happy and often being a good dealmaker.
Prior to the bailout Pandit was selling assets (mostly international operations), but then he abruptly changed course with the attempt to acquire troubled rival Wachovia, which Citi lost in a bidding war with Wells Fargo & Co. The ill-fated deal hinged on the argument that Citi needed more deposits to buttress its loses, and a larger branch network to better compete with growing rivals J.P. Morgan Chase & Co. and Bank of America Corp. The same logic reportedly pushed Citi to consider a bid for smaller regional bank Chevy Chase Bank. However, the Maryland bank may not be a likely solution with stronger bidders such as J.P. Morgan also in the running, or even offer enough deposits, as some analysts suggest.
So which is it for Pandit, selloffs or acquisitions? If American International Group Inc.'s circumstances offer any guidance, then selloffs are the likely course of action. After all, AIG's bailout is not too far off from Citi's in that the bailouts buy both companies time to restructure, notes Financial Week.
Citi's bailout also may mean Pandit's peers could soon be tested if more banks need future bailouts, as a New York Times story points out. According to Financial Week, Paul Miller at Friedman Billings Ramsey calculates that J.P. Morgan may need another bailout and require at least $188 billion in additional equity capital. Reuters reports that Bank of America and even Wells Fargo could be the next target of short sellers, which could lead to a second round of government bank bailouts. - Maria Woehr
Citigroup Inc. is saved. So now what's next? Likely more restructuring. While the government's bailout has pulled $306 billion worth of troubled assets
from Citi's $2 trillion balance sheet, around a trillion dollars in assets that aren't on its balance sheet (but still risky) remain. According to The Wall Street Journal, Citigroup executives will reduce the banks appetite for risk, including possibly breaking up the company down the road. So it looks like CEO Vikram Pandit (pictured) will have to continue to restructure the firm, assuming he remains in charge. 
