Citigroup announced two key management changes today: Sallie Krawcheck, Citigroup’s CFO, returns to her role as CEO of global wealth management, and Todd Thomson, who currently holds the position, is leaving the company.

The moves, say analysts, reflect Citi CEO Chuck Prince’s continued efforts to find the right fit for each of his executive team. Apparently, Krawcheck and Thompson weren’t ideal in their now former roles.

“Ms. Krawcheck headed wealth management until she took over as CFO, and her return to that position may be viewed as the bank succumbing to pressure that a new CFO be found,” writes Dick Bové, an analyst with Punk Ziegel, in a research report released today. “This is not due to failings on her part. It is due to the fact that she had never been trained as a CFO and was learning on the job while in the position,” he says.

Krawcheck, who was chairman and CEO of research outfit Sanford Bernstein before she left in 2002 to take over as head of retail at Citigroup, swapped roles with then-CFO Thomson in 2004. She was CEO of Citi's wealth management unit for only two years, but was nonetheless credited with boosting broker morale and production (for more, read Registered Rep.’s "Sallie Krawcheck has Left the Building"). However, her time as CFO was less successful, say analysts.

That Krawcheck was “green” is reflected in Citigroup’s earnings, says Bové, which were released on Jan. 19 and indicate steadily increasing operating costs. According to Bové, “net interest margins were plunging” under Krawcheck—falling 17 basis points in the last quarter. Additionally, yields on consumer loans were also down 40 basis points. Says Bové: “It is believed that a more experienced CFO could have done something to stop or ameliorate this trend. It is also possible that Chuck Prince [Citigroup CEO] … may have felt that Ms. Krawcheck was having difficulty in getting control of the cost elements in the company.”

As for Thompson, who was considered a front-runner to succeed former CEO Sandy Weil before Prince took the job, Bové says anecdotal evidence suggests he was “not happy” as the head of wealth management and had difficulty reining in costs.

Those accelerating costs have been aggravated by a stock price that has left much to be desired: Since January 2002 Citi stock is up less than 20 percent, compared to peers Merrill Lynch (50-plus percent), Morgan Stanley (40-plus percent) and UBS (nearly 150 percent). In addition, the firm recently lost its title as the bank with the largest market capitalization to Bank of America: In late November BofA’s market cap totaled $243.7 billion, while Citgroup’s market cap was $243.5 billion. (Citigroup remained on top in terms of total assets.)

Prince addressed some of these concerns in the Jan. 19 fourth-quarter earnings release, saying: “Our 2007 priorities are clear: generating sustainable growth in U.S. consumer, growing international consumer, corporate and investment banking and wealth management businesses more quickly, focusing sharply on expense management and remaining highly disciplined in credit management.”

Bové, for one, says speculative talk that Citi’s board may ultimately remove Prince isn’t realistic and even likes the firm’s prospects: “The struggle to turn this company around is a mammoth one but it is being done, and Mr. Prince is making the right moves.”