Charles Prince, chief executive of Citigroup, resigned on Sunday following the news that the US bank may have to write off $11 billion of sub-prime losses.
“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,” affirms Prince, according to Reuters.
The bank is expected to write down $5 billion to $7 billion of sub-prime mortgages, after tax, but these figures may worsen. Shares in the bank have dropped by 32% this year and 17% since Prince took over as chief executive in October 2003.
Prince’s departure follows that of Stanley O’Neal, chief executive of Merrill Lynch, who was forced to resign following write downs of $8.4 billion.
Replacing Prince is Robert Rubin, former US Treasury Secretary. Sir Win Bischoff has been named as acting chief executive.