Vikram Pandit, the chief executive of Citigroup who was appointed at the start of the financial crisis, has stepped down. He will be succeeded by Michael Corbat, who previously ran the firm’s Europe, Middle East and Africa business.

Vikram Pandit, the chief executive of Citigroup who was appointed at the start of the financial crisis, has stepped down. He will be succeeded by Michael Corbat, who previously ran the firm’s Europe, Middle East and Africa business.

John Havens, president and chief operating officer, resigned in light of Pandit’s decision. Havens, who also ran the institutional clients group, said he had planned to retire at the end of the year. It is not clear who will replace him at this time.

Citigroup yesterday reported net income of $468 million for the third quarter of 2012, an 88 per cent slide from the same three months a year ago due in part to one-off factors, the bank said. This was partly due to a pre-tax loss of $4.7 billion ($2.9 billion after-tax) from the previously announced sale of a 14 per cent interest in Morgan Stanley Smith Barney, as well as an impairment to the value of the firm’s remaining stake.

At the end of August Citi said in a filing that the "unexpectedly low" valuation given to MSSB by Morgan Stanley could cause "a significant non-cash GAAP charge to net income in the third quarter 2012".

However, in a statement yesterday Pandit said the price agreement on MSSB had given the firm “more certainty” on its exit, and had added to the reduction of Citi Holdings – the assets of which it is winding down in the wake of the crisis. Citi Holdings now makes up 9 per cent of the group’s balance sheet.

“We are managing risk very carefully given global economic conditions so we can continue to grow our businesses safely and soundly,” he said yesterday.

Pandit has also stepped down as a member of the firm’s board, and the board has unanimously elected Corbat.

“Given the progress we have made in the last few years, I have concluded that now is the right time for someone else to take the helm at Citigroup,” said Pandit today.

Michael O’Neill, chairman of the Citigroup board of directors, said: “We respect Vikram’s decision. Since his appointment at the start of the financial crisis until the present time, Vikram has restructured and recapitalized the company, strengthened our global franchise and re-focused the business.”

Commenting on Corbat’s appointment, O’Neill noted Corbat’s role in the financial crisis, when he “successfully led the divestiture of more than 40 businesses, helping to strengthen the company’s balance sheet substantially”.