Citicorp Hires Steffen to Preserve Gains

Citicorp, seeking to protect the cost-cutting gains it has made in recent years, said Thursday that it has hired turnaround expert Christopher Steffen, the former chief financial officer at Eastman Kodak Co.

Steffen will be a senior executive vice president at the nation’s largest bank when he starts work in June. He will oversee the bank’s productivity programs and its audit and internal operations.

“The reputation of Steffen is that of being a slash-and-burn cost cutter. We have done that. We have to make sure we keep our gains,” Citicorp spokesman John Morris said.

Citicorp has cut costs by $1.3 billion in the last two years and eliminated 14,000 jobs.

“It’s a positive. It means that Citicorp will continue to emphasize costs and operating controls,” Sanford C. Bernstein analyst Ronald Mandle said of the move.

Steffen resigned from Kodak unexpectedly in April in an apparent management clash with Kodak Chairman Kay Whitmore.

The world’s largest photographic products company had hired him three months earlier to help it through a restructuring program after Steffen engineered a turnaround at Honeywell Inc.

Banking industry analysts said Citicorp’s hiring of Steffen is a signal that the bank does not intend to lapse into the control problems of the past or to reinflate its costs.

“Citicorp has been criticized by regulators more than once with respect to its controls. I suspect this will answer that for them,” said James McDermott, an analyst with Keefe Bruyette & Wood.