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| Version 6 | Version 7 |
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| World's biggest bank's boss quits | World's biggest bank's boss quits |
| (19 minutes later) | |
| Charles Prince, the chairman and chief executive of the world's biggest bank, Citigroup, has resigned. | Charles Prince, the chairman and chief executive of the world's biggest bank, Citigroup, has resigned. |
| He will be replaced as chairman by former US Treasury Secretary Robert Rubin, while Sir Win Bischoff will serve as interim CEO. | He will be replaced as chairman by former US Treasury Secretary Robert Rubin, while Sir Win Bischoff will serve as interim CEO. |
| Investor calls for Mr Prince to go have increased since the bank reported a 57% drop in quarterly profits, after losses in the sub-prime mortgage market. | Investor calls for Mr Prince to go have increased since the bank reported a 57% drop in quarterly profits, after losses in the sub-prime mortgage market. |
| He is the second head of a leading US bank to step down within a week. | He is the second head of a leading US bank to step down within a week. |
| The head of Merrill Lynch, Stan O'Neal, resigned after reporting heavy losses. | |
| CITIGROUP FACTS World's biggest bank by market valueCitibank founded in 1812Group has 200 million customer accountsOwns brands such as Diners Club and Schroder & CoMore than 300,000 staff worldwideOwns $55bn of sub-prime debt class="" href="http://newsvote.bbc.co.uk/1/shared/fds/hi/business/market_data/shares/2/15627/intraday.stm">Check Citigroup share price | |
| After Mr Prince stepped down, Citigroup revealed that it was facing losses of between $8bn and $11bn in previously undisclosed losses due to a decrease in the value of its $55bn portfolio of sub-prime loans. | |
| And it warned that there could be further losses to come in its trading positions in sub-prime mortgages if its hedging operations did not succeed. | And it warned that there could be further losses to come in its trading positions in sub-prime mortgages if its hedging operations did not succeed. |
| 'Structure is broken' | 'Structure is broken' |
| "Given the size of the recent losses in our mortgage- backed securities business, the only honourable course for me to take as chief executive officer is to step down," Mr Prince said on Sunday. | "Given the size of the recent losses in our mortgage- backed securities business, the only honourable course for me to take as chief executive officer is to step down," Mr Prince said on Sunday. |
| But some analysts say that the sub-prime losses were just the last straw. | But some analysts say that the sub-prime losses were just the last straw. |
| "When you look at the trillions of dollars in assets that Citi has and you're talking about potential exposure of maybe $15bn: it's bad but it's not the end of the world," said Bill Smith from Smith Asset Management in New York. | "When you look at the trillions of dollars in assets that Citi has and you're talking about potential exposure of maybe $15bn: it's bad but it's not the end of the world," said Bill Smith from Smith Asset Management in New York. |
| SUB-PRIME CRISIS EXPLAINED Special series on how bad US home loans are affecting us allToday: Spread of sub-prime Friday: US economy stalls Two million set to lose homes Readers' experiences | |
| "The actual structure of Citigroup is broken - it's too big, it's too bloated and we think it should be broken up into three of four pieces," he added. | "The actual structure of Citigroup is broken - it's too big, it's too bloated and we think it should be broken up into three of four pieces," he added. |
| The board of Citigroup paid tribute to Mr Prince, with Alain Belda saying: "We thank Chuck for his unwavering commitment to Citi, its employees and its shareholders." | The board of Citigroup paid tribute to Mr Prince, with Alain Belda saying: "We thank Chuck for his unwavering commitment to Citi, its employees and its shareholders." |
| Earnings revisions | Earnings revisions |
| Mr Prince's resignation follows the sudden increase in the projected losses suffered by the group. | Mr Prince's resignation follows the sudden increase in the projected losses suffered by the group. |
| Earlier, Citgroup had reported that net income (profits) dropped to $2.38bn from $5.51bn a year earlier, in the three months to the end of September. | Earlier, Citgroup had reported that net income (profits) dropped to $2.38bn from $5.51bn a year earlier, in the three months to the end of September. |
| On Monday morning, Citigroup shares rose 5.8% in value on their Japanese stock market debut, hours after Mr Prince's departure was confirmed. | On Monday morning, Citigroup shares rose 5.8% in value on their Japanese stock market debut, hours after Mr Prince's departure was confirmed. |
| From a tentative starting price of 4,330 yen, based on Friday's New York close, they traded at 4,580 yen. | From a tentative starting price of 4,330 yen, based on Friday's New York close, they traded at 4,580 yen. |
| Sub-prime woes | Sub-prime woes |
| Citigroup has been one of the most active participants in the sub-prime mortgage-backed securities market, buying billions of dollars worth of mortgages and then selling them on to international investors. | Citigroup has been one of the most active participants in the sub-prime mortgage-backed securities market, buying billions of dollars worth of mortgages and then selling them on to international investors. |
| But since August the credit market for these types of securities has frozen up, leaving many big banks holding unsold mortgage securities whose value has taken a tumble. | But since August the credit market for these types of securities has frozen up, leaving many big banks holding unsold mortgage securities whose value has taken a tumble. |
| The lack of a market has made it difficult for companies to evaluate the size of their potential losses. | The lack of a market has made it difficult for companies to evaluate the size of their potential losses. |
| In its statement, Citi said that its securitized mortgage-backed debt obligations "are not subject to valuation based on observable market transactions." | In its statement, Citi said that its securitized mortgage-backed debt obligations "are not subject to valuation based on observable market transactions." |
| Instead, it has had to estimate the fair value of those securities, based on assumptions about future house prices and cash flows from the underlying mortgages. | Instead, it has had to estimate the fair value of those securities, based on assumptions about future house prices and cash flows from the underlying mortgages. |
| Overall, there are over $1 trillion worth of sub-prime mortgage-backed securities outstanding, and the Federal Reserve has estimated that the financial sector as a whole could lose at least $100bn. | Overall, there are over $1 trillion worth of sub-prime mortgage-backed securities outstanding, and the Federal Reserve has estimated that the financial sector as a whole could lose at least $100bn. |