Citigroup has drafted one of its stalwarts, who was on the verge of retiring, to help the bank regain the confidence of the Federal Reserve.
Eugene M. McQuade, who last month had announced plans to retire as chief executive of Citibank, will lead the bank’s preparations for the stress test over the next year.
In a memo to employees on Thursday, Citigroup’s chief executive, Michael L. Corbat, said the Fed’s recent objections to the bank’s plans to increase its dividend were “a call to action for our firm.â€
“Gene is fully empowered to do whatever is necessary, and I will devote any resource required, to ensure our next capital plan is not objected to,’’ Mr. Corbat said in the memo.
Previously, the bank’s preparation for the annual stress test was led by the bank’s finance team, run by the chief financial officer, John C. Gerspach, and the franchise risk and strategy team, headed by Brian Leach.
“Whatever the gaps between the Fed’s expectations and our performance, we need to close them,’’ Mr. Corbat said.
Those teams will now report to Mr. McQuade in preparing for next year’s stress test or during the process of resubmitting this year’s capital plan, which was rejected by the Fed. Citigroup has not said when it plans to submit a revised plan.
Last month, Citigroup announced that Mr. McQuade, who is 65 years old, would step down as chief executive of Citibank, the entity that holds 70 percent of the company’s assets and oversees its vast international business. Mr. McQuade had been nominated to serve on the bank’s board after his retirement. But the board has withdrawn his nomination so Mr. McQuade can focus on his new duties.
Mr. McQuade took over the helm of Citibank during the financial crisis and was a crucial link to regulators, the bank said.
