The US regulator Federal Deposit Insurance Corporation has questioned the generally positive conclusions in a government-mandated review of Citigroup's top management, says a media report.
Attributing to people familiar with the situation, the Wall Street Journal said that some officials at the agency have expressed doubts about the rigour of the report, which was based partly on interviews of Citi executives who were asked to rate the effectiveness of their colleagues.
According to the daily, the FDIC has questioned whether Vikram Pandit, a longtime investment banker until he took over as CEO of Citi in December 2007, can manage a company as complicated and troubled as Citigroup.
The FDIC insures the deposits in more than 8,000 US banks, among other regulatory responsibilities.
The report awarded strong overall marks to Citi's management team and its chief executive Pandit in particular, but took a harsher stance on some of Pandit's top deputies, the daily said citing people familiar with the matter.
As per the publication, the report took a harsher stand on Terri Dial, the head of its global consumer businesses, Don Callahan, the bank's chief administrative officer and Lewis B Kaden, a vice chairman who was rotated through a number of top positions.
The review, conducted this summer for Citigroup's board by recruiting and consulting firm Egon Zehnder International, was triggered by the government's stress tests of top US banks last spring.
The findings still are being reviewed, the sceptical reaction could cause the FDIC to give the report little weight during the next regulatory assessment of the New York firm's management.
Management skill is one of the factors used by regulators to determine financial-health ratings of US banks. Such ratings help determine whether banks would be kept on an unusually tight regulatory leash.
The Citigroup already is operating under supervisory agreements with regulators, including the FDIC. Tensions between the bank and the agency have been mounting ever since Citigroup's bid to buy most of Wachovia Corp. With FDIC aid fell apart last fall.
The review which was completed last week, and Citigroup's board began discussing this week whether to make any management changes in response to the report.
Quoting sources, the WSJ said, the FDIC signed off on Citigroup's selection of Egon Zehnder to conduct the management review. FDIC officials vetoed a consulting firm that the bank initially proposed for the job.
After vetoing the consulting firm favored by Citi, FDIC officials sent Citi "a list of approved firms acceptable to them," and one was Egon Zehnder, which largely runs executive searches for clients, it added.
The WSJ said that one person close to the agency described the outside report as "a total whitewashing." While others are having second thoughts about the qualifications of Egon Zehnder.
