Citi's New CEO Michael Corbat Speaks - Business Insider

President and COO John P. Havens also stepped down. ?

Michael Corbat, a former Harvard football player who previously headed Citi's?Europe, Middle East and Africa business, was?named the new CEO. ?

One question that came up is whether he's ready for the CEO role or needs to get up to speed.?

"I think I'm fortunate in a couple of respects. ?I've been here at the firm for 29-and-a-half years and I have also been fortunate in those years I've spent time in probably most every major division. ?I've spent time abroad. I think I've got a pretty good understanding of where and how the firm works and so I think I come to the table with the benefit of that," he said.

"Contrary to speculation, no strategic, regulatory or operating issues precipitated his resignation. Nor is there another shoe to drop and certainly there is no issue of conduct or ethics.?Vikram is a person of impeccable integrity," Citi chairman Michael O'Neill said on a conference call with analysts.?

We were on the call and have included highlights below. ?

4:32 PM | The conference call is beginning.

Here we go.?

4:33 PM | Citi chairman Michael O'Neill's opening remarks...

"Vikram chose to submit his resignation and the board accepted it," he said.

"Contrary to speculation, no strategic, regulatory or operating issues precipitated his resignation. Nor is there another shoe to drop and certainly there is no issue of conduct or ethics.?Vikram is a person of impeccable integrity.?

"He successfully lead Citi through one of the greatest recessions in seventy-five years, re-capitalized the bank and executed strategy based on a return to the basics of banking. The accomplishments have been essential to making Citi a stronger global enterprise..."

He pointed out that the board elected Michael Corbat unanimously. ?"We believe he has the ideal experience and a proven track record."?

"The board remains confident in the strategy of our firm including the strenght of our core franchise and the wind down of legacy assets."?

4:36 PM | Michael Corbat's opening remarks...

"We owe a debt of graditude to Virkam and John Havens. ?They lead our firm through an extremely challenging time in our history. And under Vikram's leadership, we re-capitalized the balance sheet and built the financial strength you saw in our quarterly results yesterday. ?We adopted a focused strategy of core businesses in Citicorp that play to our unique historic strengths as a global bank that will provide strong growth and attractive returns over the long-term...And we've identified non-core assets we have shed."

"Today's changes do not reflect any desire to alter the strategic direction of Citi," he says, adding, "which we believe to be the right one." ?

What's more is Chief Risk Officer Brian Leach and CFO John Gerspach are both committed to staying at Citi, he says. ?

"I look forward to taking on the challenge of what Vikram started," he says.

4:42 PM | UBS Brennan Hawken asks, 'What do you expect to do differently than prior management?'

Corbat responds, "I can't speak necessarily to what he's going to do differently, but I can tell you what I'm going to do and what I'm going to focus on."?

"So first thing is this a very important time of year for the company. We are in budget and strategic planning season and we have a budget that I need to work together with several business heads and deliver by year end. ?We are in CCAR process. We've got a document to deliver by Jan. 5th. ?I think the focus is really on operating performance and a real refined focus around that.?

"I think we have the right footprint and the right resources." ?

4:46 PM | John McDonald with Sanford Bernstein asks O'Neill about lessons or takeaways from shareholders and regulators on the CCAR process and from shareholder rejection of Pandit's compensation package.

Regulators: "I will tell you that it's critical for this firm, and all firms in banking, to have strong relationships withour regulators. I think we do. As in all things, I think things can always be improved. We will focus on that. ?It's an important part of being in our industry. ?I have every confidence that Mike will have strong relationships. He already has some very good ones built."

He is "very well viewed" by regulators, O'Neill says of Corbat.?

"From a regulatory perspective, I think we're in good shape and are likely to get better."

Compensation: "Until we are clear, we're not going to say very much..We have made a statement that says we are talking to our investors. ?Spent a lot of time doing that. I think we know what the issues are. We are addressing them. Come proxy season, I think you will have a complete understanding of the approach we are taking."?

4:48 PM | Glenn Shorr from Nomura asks Corbat if he sees any need to change Citi growth focus as it's been laid out in the last couple of years.

"We feel quite strongly that the strategy we have is the right one." Corbat said.

4:49 PM | Shorr points out that this all feels really abrupt to all of them. He wants to know what really happened.

Shorr says he thinks people are pleased with the quarter. ?"We are all scratching our heads saying 'What just happened?."

"What happened was Vikram submitted his resignation and we accepted it," O'Neill responded.

"What also happened is the company has been engaged in a two-year process to make sure if something like this happened we had a strong process and knew who should succeed the CEO. Mike has been at the center of that process and as a consequence when this occurred he was very well positioned to take this action so as I said the board is delighted that Mike has been willing to take this challenge on and I think he'll do a very good job." ?

4:50 PM | Nomura's Shorr asks Corbat for his thoughts on if he needs to get up to speed for the CEO position.

"I think I'm fortunate in a couple of respects. ?I've been here at the firm for 29-and-a-half years. ?And I have also been fortunate in those years I've spent time in probably most every major division. ?I've spent time abroad. I think I've got a pretty good understanding of where and how the firm works and so I think I come to the table with the benefit of that." ?

"But as always I'm going to be a key learner. I think these processes that we are going into are going to be a great way to do that with the budget and CCAR [capital levels].?I feel good about where I am and where we are."?

4:54 PM | Mike Mayo from CLSA wants to know what happened to cause the sudden resignation.

Mayo says just yesterday they were asking Pandit about long-term strategy on the earnings call. ?He asked what were some of the steps behind the scenes.?

On the whole pay speculation thing, O'Neill says that the answer is "categorically no."

Mayo also asked why Pandit didn't stay on for three months for a transition period. ?

O'Neill reponded with "To some degree this is actually fortuitious." He said that there are three critical processes, the budget, the three-year play and submitting a CCAR plan. ?"The new CEO needs to be part of that process." ?

4:57 PM | Mayo asks if they've looked outside for potential CEOs?

O'Neill says "absolutely."?

"We looked at internal and external candidates...We spent a lot of time."?

5:00 PM | Jeff Harte from Sandler O'Neill asks Corbat how prepared he was for this new role?

Corbat says he's been here over 29 years and has exposure to many of Citi's businesses. ?

"I feel like I've got a grasp around the firm the way it operates and how it operates," he said. ?"I feel like I've been well prepared for this." ?

5:01 PM | Harte asks him how long he's had to think about timing for this role.

O'Neill jumped in and said of course Corbat knew he was a candidate. ?"This doesn't come as a complete shock."?

"He knows he's been under consideration for some time." ?

5:02 PM | The conference call is concluded.

Source: http://www.businessinsider.com/citis-new-ceo-michael-corbat-speaks-2012-10

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