Citigroup Asia Executive Banga Leaves for Top MasterCard Role

June 20 (Bloomberg) -- Ajay Banga, Citigroup Inc.’s most senior executive in Asia, left the U.S. bank for a role at MasterCard Inc. that puts him in line to succeed Chief Executive Officer Robert Selander.

Banga, 49, will become president and chief operating officer at MasterCard, whose stock more than quadrupled since its debut in May 2006, the company said in a statement yesterday. Selander, 58, cedes his president’s title Aug. 31 and continues as CEO, MasterCard said. Banga spent 13 years at Citigroup, the New York-based lender propped up by $45 billion of U.S. rescue funds.

Banga’s exit is a blow to Citigroup CEO Vikram Pandit, who said in a speech this week that the bank would look abroad for growth as the U.S. economy slows. The government is taking a 34 percent stake in Citigroup after $36 billion of losses in six quarters. MasterCard, the second-biggest card network after Visa Inc., didn’t need money from the Treasury’s Troubled Asset Relief Program and isn’t subject to any curbs on pay.

“This is huge,” said Bill Smith, founder of Smith Asset Management Inc. in New York, who holds about 200,000 Citigroup shares. “This guy was talent.”

Banga will get a salary of $800,000, a $4.2 million signing bonus and $4.9 million in restricted stock, according to a regulatory filing by Purchase, New York-based MasterCard. The bonus will be paid in two equal installments, the first within 30 days after he starts and the second a year later, according to the filing. While he would forfeit the signing bonus if he leaves before the year is over, he gets to keep it if he isn’t named CEO by June 30, 2010, the document said.

Succession Planning

For 2008, Citigroup gave Banga a $500,000 salary and a $3.6 million “deferred cash retention award,” payable in equal installments over four years, according to a March 20 filing.

“This is really a thoughtful step in the succession- planning process,” said Harvey Greisman, a spokesman for MasterCard. Selander and Banga weren’t available to comment, he said.

Citigroup will name a successor for Banga “shortly,” the company said in a regulatory filing yesterday.

Profit at MasterCard has fallen for two straight quarters as the recession cut into consumer spending. The company lost more than half of a $59 billion portfolio of U.S. debit-card users after JPMorgan Chase & Co. decided to shift more business to Visa, people familiar with the matter said last month.

MasterCard shares have risen 13 percent this year. Citigroup is down 53 percent.

International Career

Citigroup is focusing on overseas markets after the bank’s overdependence on U.S. consumers stoked its financial woes, Pandit, 52, said in the June 16 speech in Detroit. The bank has been hobbled by writedowns on subprime mortgage bonds and an increase in consumer-loan losses.

“The executives at the top that are not the top three have to really say to themselves, ‘How long is it going to take me to get to where I aspire to?’” said Jeanne Branthover, head of the global financial services practice at Boyden Global Executive Search Ltd. in New York. “They are definitely going to be recruited for the top or the second-to-the-top jobs at other firms.”

Banga, a graduate of the Indian Institute of Management, joined Citigroup in 1996 as head of marketing in India for the consumer business. In 2000 he was promoted to head CitiFinancial and the U.S. consumer assets division. In 2002 he took over the retail bank in North America, and in 2005 he was named to head Citigroup’s international consumer-banking and finance businesses. He moved to Hong Kong in early 2008 after being named by Pandit to oversee all of the bank’s businesses in Asia.

He worked at Nestle SA for 13 years, in sales, marketing and management roles, and worked for PepsiCo, where he helped expand the company’s fast-food franchises into India.