Citi building
The building formerly known as the Citigroup Center, which continues to house the company, is seen in midtown Manhattan. A sudden change of leadership at Citigroup raises new questions about the future of the embattled banking giant. - 

"Once you decide to move on, there's no point in hanging around." That's how Citigroup's chairman explains the abrupt departure of the banking giant's CEO, Vikram Pandit.

It was Pandit who led the bank through the financial crisis over the past four years, with the help of $45 billion in federal bailouts. The bank has since repaid those loans, and lately its fortunes have been showing signs of improvement. Just yesterday, Pandit was sounding upbeat as he announced an unexpected rise in quarterly profits, and his resignation appeared to come out of nowhere.

Citigroup Chairman Mike O'Neill told analysts in a conference call that Pandit simply decided to submit his resignation, and the company's board of directors accepted it.  O'Neill insisted there was no dispute over pay. "No strategic, regulatory or operating issue precipitated the resignation," O'Neill added, "nor is there another shoe to drop."

Despite those reassurances, Bahl & Gaynor banking analyst and portfolio manager Matt McCormick sees the abrupt change in leadership as more bungling at Citigroup. He says it's just another reason to avoid investing in the stock.

"They have failed to beat expectations for so long, why would somebody go to Citigroup?" asks McCormick. "Why would somebody invest in their stock when some of their peers are excelling at areas where they should be, and they missed it?"

McCormick and other analysts point to the bank's third quarter earnings report, which showed Citi has failed to capitalize on the recent rebound in mortgage lending.

Morningstar analyst Jim Sinegal says he's not expecting any major change in direction, however, since Pandit's recent moves were starting to pay off.

"Citi was a financial supermarket offering everything to everyone a few years ago. That got them into a lot of trouble," Sinegal says. He says Pandit has scaled back the business to focus on global businesses and urban consumers around the world, with some success.

Sinegal points out that Citigroup isn't the only bank that's been dealing with turbulence, with some of its rivals suffering through unexpected losses and legal challenges.

"I think it's definitely a fair question to ask whether anyone is talented enough to keep an eye on all of the operations at these large, complex institutions," says Sinegal.

It could be, he says, that "too big to fail" might also mean "too lumbering to succeed."