(Updates with Rhodes in third paragraph)
Oct. 14 (Bloomberg) -- Citigroup Inc., the third-biggest U.S. lender by assets, appointed company director Michael O’Neill as chairman of the board overseeing Citibank NA, its primary banking subsidiary.
O’Neill, formerly the chief executive officer of Bank of Hawaii Corp. and an executive at Bank of America Corp., replaced Jerry Grundhofer, according to a document dated Sept. 29 and posted on New York-based Citigroup’s website. Grundhofer left the board in June and became chairman of the U.S. subsidiary of Banco Santander SA, Spain’s biggest lender.
The Citibank subsidiary is covered by federal deposit insurance. Citigroup restructured the board in 2009 to add more independent directors as an added layer of supervision after taking a $45 billion bailout from taxpayers. The subsidiary was previously led by Bill Rhodes, who at the time was a Citigroup executive and is now a senior adviser to the firm.
“If the subsidiary has got to be run tighter, then Michael O’Neill is a great pick to be the chairman,” said Thomas Brown, CEO of Second Curve Capital LLC and a Bloomberg Television contributing editor. “His understanding of risk and return is what makes him a great guy to be the chairman of Citibank NA.”
O’Neill, 64, and Shannon Bell, a spokeswoman for Citigroup, declined to comment on the appointment. Citigroup Chairman Richard Parsons didn’t respond to messages seeking comment.
Director Anthony Santomero replaced Grundhofer as chairman of the board’s risk-management and finance committee, another document showed. Santomero, former head of the Federal Reserve Bank of Philadelphia, takes over a panel charged with reviewing Citigroup’s ability to manage its risk. He didn’t return phone calls or e-mails seeking comment.
Parsons recruited O’Neill, Santomero and Grundhofer in 2009 to boost the board’s experience in the wake of the bailout. Taxpayers also guaranteed more than $300 billion of the bank’s riskiest assets. The bank has since repaid the bailout.
--Editors: David Scheer, Steve Dickson
To contact the reporters on this story: Donal Griffin in New York at Dgriffin10@bloomberg.net
To contact the editor responsible for this story: David Scheer at email@example.com.