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Citi's board unanimously elected Michael Corbat to succeed Pandit as CEO and fill his seat on the board/AFP

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Citigroup CEO Pandit quits, shocking Wall Street

Pandit told Bloomberg Television that he made the decision Monday during a discussion with Citigroup board chairman Michael O’Neil.

“I’ve been thinking about this for a long time. It was my decision. I made it talking to Mr. O’Neill, and we did it understanding that the company was ready,” he said.

Investors welcomed the change. Citi shares were up 1.2 percent at $37.10 in afternoon trade in New York.

Citi, the biggest US bank before the financial crisis, had been transformed into a financial supermarket by former CEO Sandy Weill.

But the bank suffered deeply in the crisis, requiring an injection of $20 billion from the government and hundreds of billions of dollars in additional guarantees to stay afloat.

Under Pandit, Citi has recovered profitability, shedding its riskier assets and refocusing on core banking activities.

Still, it was one of four large US financial institutions – out of 19 reviewed – to fail a stress test last March, and the Federal Reserve rejected its plan to resume paying dividends.

On Monday, Citigroup reported an 88 percent drop in third-quarter earnings from a year ago, to $468 million, hit by heavy one-time charges, including a $4.7 billion writedown on the sale of its MSSB stake.

Standard & Poor’s analyst Erik Oja said that Pandit quit in a “position of strength.” “I suspect he is leaving because of differences over compensation,” he said.

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Pandit had foregone a salary in 2009-2010 when Citi was in the red; shareholders in April voted against a proposed 2011 $15 million pay package.

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