Citigroup names an operating chief
Financial services giant Citigroup Inc., under pressure to cut costs and boost revenue, on Monday named investment banking head Robert Druskin to be chief operating officer.
Druskin, 59, will help Chief Executive Charles Prince supervise all of Citigroup’s businesses, including retail banking and hedge funds, and will focus on paring expenses. He’ll remain at the helm of the investment bank.
Druskin will be Citigroup’s first chief operating officer since Robert Willumstad quit in 2005.
Prince tried to deflate rumors that a bigger management shake-up was in the offing, and that the company -- parent of Citibank, brokerage Smith Barney and CitiFinancial -- might spin off one or more major units.
In a conference call with analysts, Prince said the spinoff rumors were groundless.
That took some of the steam out of Citigroup’s shares, which in recent sessions have surged to their highest level since 2000 on talk of a change of strategy.
The company’s stock, which rose 5% last week, added $1.03 to $52.88 on Monday before the announcement and fell to $52.15 after hours. The price is up 9% this year, lagging the 13.2% rise in the Standard & Poor’s 500 index.
Investors have been pressuring New York-based Citigroup to improve its financial performance since at least July, when the company’s largest shareholder, Saudi Prince Alwaleed bin Talal, said the firm needed to take “draconian measures” to control costs.
Prince, in a memo to Citigroup senior management, said he had asked Druskin “as a first priority in his new role to undertake a comprehensive review of our companywide expense base and ensure that we operate as efficiently and effectively as possible as we grow our franchise.”
Druskin has spent much of his 15 years at Citigroup and its predecessor companies as an administrator with responsibilities in operations, technology, purchasing and business planning. While former CEO Sandy Weill was making the more than 100 acquisitions that built Citigroup, he often turned to Druskin to cut costs and streamline computer and back-office systems.
When Prince ran Citigroup’s investment bank for a year before becoming CEO in October 2003, Druskin was his top deputy. Last year, while speaking at a conference, Prince, 56, referred to Druskin as “my old partner.”
Much of investor speculation in recent days centered on whether Sallie Krawcheck, Citigroup’s chief financial officer and head of strategy, would leave the company.
“Sallie isn’t going anywhere,” Prince said. “She’s doing a great job.”
