Citigroup Inc has named veteran financial expert Richard Stuckey to head a new team that focuses on managing its subprime mortgage portfolio, according to an internal memo seen by Reuters on Tuesday.
Stuckey will head Citigroup's Sub-Prime Portfolio Group -- created after the largest U.S. bank said it would write down as much as $11 billion of subprime debt.
The team will manage the company's asset-backed securities collateralized debt obligations warehouse assets, unsold primary ABS inventory and ABS super senior exposures. These will be removed from the structured credit portfolios.
Stuckey was one of the team of financial heavyweights called in to unwind the positions of failing hedge fund Long-Term Capital Management in the late 1990s.
Citigroup operates in more than 100 countries and generates nearly half of its revenue internationally.
On Monday, the company was unable to assure investors that the potential $11 billion write-down for subprime mortgages would not grow, and its credit ratings were downgraded.
Citigroup also reduced its previously reported third-quarter profit because of worsening credit markets, which it expects will lower future cash flow.
The company's chairman and chief executive, Charles Prince, resigned on Sunday. Former U.S. Treasury Secretary Robert Rubin, who led the bank's executive committee, was named chairman, and Win Bischoff, head of the European business, became acting chief executive.
(Reporting by Daisy Ku and Justin Grant; editing by Quentin Bryar)