Forced into an emergency exit

When Charles Prince replaced Sanford 'Sandy' Weill at the helm of Citigroup Inc, he was given the unenviable task of replacing a legend. Shareholders feared he could never fill Weill's shoes.

It appears they were right.

Prince's tumultuous four-year tenure at the helm of the largest US bank by assets ended on Sunday, when he resigned as chairman and chief executive.

The 57-year-old native Californian became Wall Street's second chief executive to lose his job after this summer's credit market collapse, joining Merrill Lynch & Co's Stanley O'Neal.

Citigroup took a $6.5 billion write-down for subprime mortgage and other losses in the third quarter. On Sunday, it said it may write off another $8 billion to $11 billion for subprime mortgages, reducing net income this quarter by $5 billion to $7 billion. It also said those numbers could grow.

"I am responsible for the conduct of our businesses," Prince said in a memo to employees. "The size of these charges makes stepping down the only honourable course for me to take as chief executive officer. This is what I advised the board."

Like Merrill, which had an $8.4 billion write-down that analysts expect to grow, Citigroup ventured far into risky forms of debt and leveraged lending.

Prince took much heat for his July 9 comments that the bank was "still dancing" in private equity, just as it appeared to many that the music was about to stop.

"They should have fired him a while back," said Jim Huguet, co-chief executive of Great Companies LLC in Tampa, Florida. "He was brought in to fix their legal problems because he's a lawyer, but they need someone who is capable of really building the business, and I don't think that's Prince's forte."

Prince worked for Weill for 17 years, becoming his most trusted adviser as a small Baltimore firm called Commercial Credit Co morphed through dozens of acquisitions into the largest U.S. bank.

Work first

Known as a workaholic, Prince in 1997 even delayed a life-saving kidney cancer operation until Travellers Group, then his employer, completed its acquisition of investment bank Salomon Brothers, according to the Weill biography Tearing Down the Walls by Monica Langley.

Prince graduated from the University of Southern California law school in 1975 and took a job at US Steel Corp. In 1979, he joined Commercial Credit, where Weill became chairman in 1986.

After he took over Citigroup, Prince spent much of his first two years focused on cleaning up a slew of ethical and regulatory problems at the bank. Citigroup had already paid $400 million in the Wall Street stock research scandal.

He wrestled with Citigroup's role in the collapses of Enron Corp and WorldCom Inc, a scandal over its Japanese private bank, and a rogue bond trade that upended European markets.

Citigroup paid out more than $5 billion to resolve investigations. In 2005, the Federal Reserve barred it from big acquisitions for a year, but lifted the ban in April 2006 after Prince's campaign to clean up internal ethics bore fruit.

Prince turned his focus toward improving performance, and bolstering business outside the United States.

But unlike Bank of America Corp and JPMorgan Chase & Co, which spent more than $140 billion on major acquisitions, Prince focused on growing organically and through smaller acquisitions. He said Citigroup was too big for the 'transformational' purchases Weill was known for.

And while Prince sold slower-growing asset management and insurance units, he struggled to inject life into Citigroup's largest business, US consumer banking. Upper management turned into a revolving door, leaving Citigroup with few if any internal replacements ready to replace Prince immediately.

Investors grew fed up. Saudi Prince Al Waleed Bin Talal, Citigroup's largest individual investor, last year urged "draconian" measures to cut costs.

While Prince made progress earlier this year, and set 17,000 job cuts, the $6.5 billion write-down negated these efforts.

Now Prince has himself paid the price - with his job.

Profile: Charles O. Prince III

Age: 57

Birth location: Lynwood, California

Experience: Started out as an attorney in 1975 for US Steel Corp. Joined Commercial Credit Co. in 1979 and within a few years was named general counsel. Commercial Credit in 1988 bought Primerica Corp., which later bought Travellers.

In 1996, Prince was named executive vice-president of Travellers, which bought the Salomon brokerage in 1997 and then merged with Citicorp in 1998. From 2000 to 2002, Prince served as chief administrative officer, chief operating officer, and chairman and chief executive officer of Citi's markets and banking division. In 2003, then-CEO and chairman Sanford I. Weill handed the CEO position to Prince. Three years later, Prince got the chairman title, too.

Education: Prince earned his law degree in 1975 from the University of Southern California, where he also received his bachelor's degree and a master's degree in international relations. He also holds a master of laws degree from Georgetown University.

Family: Wife Margaret Wolff, an attorney; two children from a previous marriage