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Pandit's inner circle breaks up

October 17, 2012: 8:59 AM ET

Vikram Pandit installed three of his former colleagues in senior positions at Citigroup when he took over in 2007. Now the band is broken up, and Citi's respected chief risk officer Brian Leach is staying.

By Carol J. Loomis

Vikram Pandit

Former Citi CEO Vikram Pandit

FORTUNE -- On Citigroup's generally uninformative conference call on Tuesday afternoon, the biggest news may have come after Chairman Michael O'Neill finished his brief remarks and new CEO Michael Corbat launched his. Corbat's bulletin: Chief risk officer Brian Leach "has committed to stay."

That bears big notice because Leach was one of three Morgan Stanley (MS) veterans whom Vikram Pandit — out as CEO as of Tuesday — installed in important Citi jobs when he took over in 2007 and who were very close to him. Fortune described them soon after as "the three amigos."

One of the amigos, John Havens, president of Citi (C) and also head of the Institutional Clients Group, announced Tuesday that, with Pandit's departure, he would be resigning from Citi also. (Havens positioned his exit as an acceleration of plans he already had to leave at the end of this year).

MORE: Sheila Bair: "I'm sure Vikram still blames me"

The third amigo was Don Callahan, Citi's chief administrative officer, whom Corbat, in his remarks, did not mention. But since Corbat did put the spotlight on both Leach and chief financial officer John Gerspach (also staying), the omission of Callahan's name stood out. The bet here is that Callahan will be following Pandit out the door.

Citi's risks, like those of all major banks, are manifold and Leach is widely regarded as having done an excellent job in handling them. So the news that he's sticking around is important for the health of the company. One former Citi director said yesterday that Leach was "fabulous."

That same one-time director, it should be said, got to know Pandit well and thinks very highly of him: "Step by step," the director says, "he stabilized and strengthened the bank."

That favorable opinion is not shared by former FDIC chairman Sheila Bair, who said today she had found Pandit "maddening" to deal with and just "not up to the job." Bair's recently released book, Bull by the Horns, repeatedly knocks Pandit's performance.

Citi's conference call added very little to what is known about Pandit's abrupt departure from his job. But the story—given the importance of the company—is almost certain to come out. In the meantime, disruption of this kind cannot be good for any company, much less one that has been digging itself out of a deep hole for five years.

 

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