POSTED: 1:30 a.m. HST, Oct 15, 2011
Citigroup Inc., the third-biggest U.S. lender by assets, appointed former Bank of Hawaii leader 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.
O'Neill, who was hired as chairman and CEO at Bank of Hawaii on Nov. 3, 2000, transformed the bank into a more efficient operation, increased earnings to record highs and saw the stock price rise nearly fourfold before stepping down at age 57 in August 2004 to spend more time with his two sons on the East Coast and to look after his mainland and real estate investment.
O'Neill also became somewhat of a local TV personality with the bank's "Tell Mike" campaign.
The Citibank subsidiary is covered by federal deposit insurance. Regulators sought to make its board independent in 2009, adding a layer of supervision after Citigroup took a $45 billion bailout from taxpayers. The subsidiary was previously led by Bill Rhodes, a Citigroup executive.
"If the subsidiary has got to be run tighter, then Michael O'Neill is a great pick to be the chairman," said Thomas Brown, chief executive officer 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."
Citigroup Chairman Richard Parsons (a University of Hawaii graduate) 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.
O'Neill, 64, and Shannon Bell, a spokeswoman for Citigroup, would not comment on the appointment. Parsons didn't respond to messages seeking comment.
Director Anthony Santomero has 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 emails seeking comment.
Star-Advertiser business reporter David Segal contributed to this story.