Prince Must Go, Say Analysts

by Stewart Douglas

Story link: Prince Must Go, Say Analysts

Markets have continued calls for Chuck Prince’s head in the wake of a recent management reshuffle within investment bank Citi which it was hoped would silence fears that the organisation was poorly managed over the US sub-prime mortgage lending crisis.

Shares in the Citigroup fell over the course of trade today after yesterday evening’s announcement that there was to be a radical overhaul of senior management within the organisation in order to strengthen and consolidate post-credit crunch.

Having sustained losses of around $3.3 billion over the course of the summer, investors have been calling for Chuck Prince to be removed from his position as the bank’s chief executive, to make way for fresh blood at the top to ensure the continuation of prudent and profitable investment management.

The reshuffle saw two high profile executives involved in the sub-prime situation make way as a result, despite claims that Prince should join them immediately to protect the bank and acknowledge its mismanagement over the sub-prime issue before any further damage to its share price. 

Despite the somewhat radical shift in management positions, the fact still remains that critics of Prince are becoming more vocal in their calls for his resignation with immediate effect.

However markets have been less than pleased with the steps taken by Prince, which it felt were too little and under significant duress from individual investors concerned about the safety and investment of their capital.

It is thought that Chuck Prince’s position is currently very unstable within the Citigroup management structure, with the potential for the board to take more decisive action should results fail to pick up again at the expected rate.  It remains to be seen, however if investors will remain confident in the banks abilities with Prince still in post.