In a most shocking and surprising news to hit in recent times, Citigroup Inc. (NYSE:C) Chief Executive Vikram Pandit has resigned effectively immediately. Chairman Michael O’Neill, announced the news informing investors, Michael Corbat, previously chief executive for Europe, Middle East and Africa, will replace Pandit.

Mr. Pandit became CEO at Citigroup Inc. (NYSE:C) in December 2007, and spent the earlier part of his career at Morgan Stanley (NYSE:MS). “Citigroup is well-positioned for continued profitability and growth, having refocused the franchise on the basics of banking,” Mr. Pandit said.

Vikram Pandit

“We respect Vikram’s decision,” Chairman Michael E. O’Neill said. “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”.

On the appointment of Michael Corbat, Mr. O’Neill said “Mike is a proven, hands-on leader, who is known for his focus on enhancing productivity, holding people accountable, and practicing sound risk management,” and added “He has consistently delivered impressive bottom-line results at many of our major global business units and has forged a strong track record of improving efficiency and mitigating risk, while also optimizing the allocation of the Company’s capital”.

On Monday, Citigroup reported a fall of 88 percent in its third-quarter profit to $468 million, as the bank took charges tied to the value of its debt and the sale of a stake in its brokerage joint-venture, but revenues from its main businesses continued to improve.

Mr. Corbat has been at Citigroup Inc. (NYSE:C) and its predecessor companies since his graduation from Harvard University with a bachelor’s degree in economics in 1983. He also held a number of positions at Salomon Brothers, one of Citi’s predecessor companies, including Managing Director roles in Emerging Markets, High Yield, and Derivatives. On being appointed as a CEO, Mr. Corbat said “The fundamentals we have in place today are solid, and we are on the right path. Citi’s businesses, footprint and talent are unmatched, and we will be relentless in our drive toward operating excellence and risk management,” and added “I also wish to extend my personal appreciation to Vikram for all he has achieved. Without his leadership, Citigroup Inc. (NYSE:C) would not be so well positioned globally to tackle the challenges and opportunities ahead of us”.

Chief Operating Officer John Havens, a long-time associate of Pandit, also resigned. Mr. Pandit will resign as a board member, as well.

Shares rose 5.5 percent yesterday, but fell 1.4 percent to $36.19 in premarket trading. The stock is up 29 percent in the past 12 months.