Citibank chairman and CEO Charles Prince announced his resignation on Sunday 4 November, after the bank said it may have to write off up to $11 billion in sub-prime mortgage losses, over and above a $6.5 billion write-down last quarter.

Former US treasury secretary Robert Rubin, who chaired Citigroup''s executive committee, was named chairman in his place, while Citigroup''s European operations chief Sir Win Bischoff was named acting chief executive. In a joint interview, Rubin and Bischoff expressed support for Prince''s overall strategy.

Citigroup expects to write down another $5 billion to $7 billion after taxes ($8 billion to $11 billion before taxes) for its $55 billion of exposure to US sub-prime mortgages. The write-down may rise if markets worsen, the bank said. Citigroup''s previous $6.5 billion write-down related to sub-prime mortgages, loan losses and other debt.

The company had $2.35 trillion in assets as of 30 September, making it the largest bank in the US. It has about 300,000 employees and operates in 100 countries. In the US alone, it has 1,015 Citibank branches, 2,467 CitiFinancial branches and 803 Smith Barney brokerage offices.

During the housing boom, Wall Street made enormous profits by turning mortgages — many of them sub-prime home loans made to borrowers with poor credit — into bonds and a series of exotic securities. The banks sold the securities to big investors, but also held on to large numbers of them, which have lost much of their value owing to the downturn in the housing market.

"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," Prince said in a memo to employees. The size of the write-down came as a shock to most analysts, and indicates the speed at which sub-prime crisis is unravelling.

Prince''s exit ends a tumultuous four-year tenure marked by heavy turnover among senior executives and questions over strategy. His departure followed just five days after Merrill Lynch ousted Chief Executive Stanley O''Neal following a $8.4 billion write-down.

O''Neal left Merrill with a $161.5-million retirement package. Prince walks away with an estimated $99 million in vested stock holdings and a pension. He has already made $53.1 million in salary and bonuses over the last four years.

During his tenure, Prince struggled to improve results at Citigroup, especially in US consumer banking, its biggest business. He was also under pressure to cut expenses, especially from the bank''s largest individual investor, Saudi Prince Alwaleed bin Talal. While Prince appeared to have some success this year, the write-downs have changed everything.

But, despite the crisis, Prince said in July that Citigroup was "still dancing" to the private equity buyout boom when it was about to crash. This led investors to believe that the bank''s chairman didn''t fully appreciate the high risks in leveraged lending.

Citigroup has exposure to mortgages through tens of billions of dollars of off-balance-sheet structured investment vehicles (SIVs). The bank is presently in talks with rivals to set up a conduit to buy assets from the troubled SIVs. The US Securities and Exchange Commission (SEC) is examining whether Citigroup accounted properly for its own SIVs.

Prince, 57, served for many years as the chief lawyer to Sanford Weill, the Wall Street legend who transformed a battery of disparate companies into the financial colossus we know as Citigroup. He succeeded his mentor as head of the bank, becoming CEO in 2003 and chairman in 2006.

Rubin, 69, joined Citigroup in 1999 after more than four years as treasury secretary in the Clinton administration, and chaired the bank''s executive committee. He has been a close adviser to Prince, looking after strategy rather than day-to-day operations. Earlier, he spent 26 years at Goldman Sachs, becoming co-chairman of the investment bank.

Bischoff, 66, took over Citigroup''s Eauropean operations in May 2000, after Schroders Plc''s investment banking business was taken over by Citigroup unit Salomon Smith Barney. He had been chairman of Schroders since May 1995.

It is not clear who might become permanent chief executive, or how long a search will take. A board committee consisting of Rubin, Alain Belda, Richard Parsons and Franklin Thomas will seek a replacement from internal and external candidates.

Internal candidates might include Vikram Pandit, who oversees investment banking and alternative investments, and chief financial officer Gary Crittenden. John Thain, who runs NYSE Euronext, might be considered as an external candidate, analysts said.