Beleaguered Citigroup could use a few stars these days. And CEO Vikram Pandit hopes he has found one in Paul Galant.
Galant had been running Citi’s Global Transaction Services unit, a relatively unsung but highly profitable business that generated slightly more than half of the bank’s $1.6 billion in net income in the first quarter. His success there has earned him a tougher assignment from Pandit: taking over Citi’s global credit card business. It’s no small task. Global Cards has been hit hard by the recession. Although the business generated a quarter of Citi’s profits in the first three months of the year, revenues dropped 10 percent, reflecting securitization losses and reduced card balances. As a result, net credit losses jumped 56 percent, to $1.9 billion.
Galant, 41, believes his GTS experience can help him turn around the card operation because both are scale businesses that rely heavily on technology. He plans to use the GTS payments system to streamline processing at the credit card group. “I’d like to drive a Citi-wide payment strategy that will connect the work being done in GTS to the work being done here in Cards,” he says.
Galant has been front and center since starting his new job last month. President Barack Obama met with Galant and other credit card executives in Washingon on April 23 to urge them to bring down interest rates and fees on cards. Those charges have been climbing, helping banks’ profit margins but outraging taxpayers, who footed the bill for massive bank bailouts.
Galant understands the value of being flexible. He enrolled at Cornell University as a premed student in the late 1980s but found himself attracted to the go-go atmosphere on Wall Street and switched his major to finance. After graduating he started and later sold a technology business that developed software for the construction industry, then worked in fixed income at Credit Suisse First Boston, Smith Barney and Donaldson, Lufkin & Jenrette before moving to Citi in 1995 as global head of e-commerce. “If you’re going to be in finance and you believe in the fact that the model will become more technology driven, then the right company is Citi,” he says.
