Citigroup shakes up top management, replaces CFO

By Jonathan Stempel and Elinor Comlay

NEW YORK (Reuters) - Citigroup Inc announced its biggest management shake-up since the financial crisis began, replacing its chief financial officer and installing a new banking chief as it prepares to give the government a 34 percent equity stake.

The changes, announced on Thursday, come as Chief Executive Vikram Pandit faces intense pressure to improve performance, rebuild the executive ranks in consumer banking, and shed unwanted assets. Citigroup has lost $36 billion over six quarters and received a series of federal government bailouts.

Several analysts called the management changes encouraging, though it is unclear whether they will help Pandit keep his job and what they signify about the role the government will take in running the third-largest U.S. bank.

"They've weathered the maelstrom so far" because of government help, said Malcolm Polley, chief investment officer of Stewart Capital Partners LP. "Uncle Sam is going to put their fingerprints all over this thing."

Edward "Ned" Kelly, who was named Citigroup CFO in March, will become a vice chairman focused on strategy and merger activity.

His replacement is John Gerspach, who has been Citigroup's controller and chief accounting officer. Gerspach is Citigroup's fifth CFO in five years.

Citigroup also hired Eugene McQuade as chief executive of its Citibank unit. He was recently a vice chairman of Merrill Lynch & Co, now part of Bank of America Corp, and is a former chief operating officer of mortgage financier Freddie Mac.

At Citibank, McQuade succeeds Bill Rhodes, a Citigroup senior vice chairman who will reduce his day-to-day responsibilities to focus on international operations, his specialty.