July 9 (Bloomberg) -- Citigroup Inc. changed its chief financial officer for the second time in four months, elevating Controller John Gerspach to the post and shifting Edward “Ned” Kelly to a role heading strategy.

Kelly, named CFO in March when Gary Crittenden stepped aside, will become vice chairman and help oversee Citi’s “strategic and operational priorities,” including mergers and acquisitions, New York-based Citigroup said today in a statement. Crittenden, 55, who became chairman of the Citi Holdings division when he relinquished the CFO job, left to become a managing director at private-equity firm Huntsman Gay Global Capital LLC.

The shuffle extends a string of management changes at Citigroup as Chief Executive Officer Vikram Pandit struggles to stanch losses and appease his government overseers following the bank’s $52 billion bailout. Last week, Pandit had to name new managers for Asia after the regional chief, Ajay Banga, departed to become president of MasterCard Inc.

“I was surprised when I heard that they made a shift so quickly, because generally you want to put in a CFO who’s going to be there for a while,” said Joe Scott, an analyst who covers Citigroup for Fitch Ratings.

Bair’s Questions

Pandit last month faced questions about his leadership from Federal Deposit Insurance Corp. Chairman Sheila Bair, people close to the bank said at the time. The FDIC learned about today’s management changes last night, a person close to the agency said.

Citigroup relies on the agency to guarantee more than $60 billion of debt under a government program set up last year to help banks refinance their obligations. The FDIC also guarantees much of the bank’s $298 billion of U.S. deposits.

Crittenden was Citigroup’s CFO from March 2007 through March of this year, as the financial crisis eroded the bank’s capital base and culminated in a $52 billion government bailout. He oversaw discussions with regulators on capital levels and accounting changes and helped lead Pandit’s cost-cutting efforts.

Of the 43 senior executives pictured in Citigroup’s 2006 annual report, only 17 remain, Jason Goldberg, an analyst at Barclays Capital Plc, wrote today in a report.

Pandit ‘Struggling’

Today’s personnel moves “are just iterations in a long- running series,” David Trone, an analyst at Fox-Pitt Kelton Cochran Caronia Waller, wrote in a report. “While the individual moves make a lot of sense to us, we believe it shows that CEO Vikram Pandit is struggling to get the right team in place.”

Kelly, 56, a former JPMorgan Chase & Co. investment banker, joined Citigroup in February 2008. He has negotiated some of Citigroup’s biggest transactions over the past six months, including the sale of majority control of the Smith Barney brokerage division, completed in May.

“There’s a lot of change going on at Citi and I don’t think it’s nearly over,” said Gary Townsend, president of Hill- Townsend Capital in Chevy Chase, Maryland. Kelly is “well known in Washington, he’s politically very astute, and he knows the numbers very well.”

Gerspach has been with Citigroup since 1990 and has held CFO and chief administrative officer positions throughout the company, according to the statement.

“Gerspach’s been there forever, so he’s very attuned to how the accounting and finance works at Citi,” Fitch’s Scott said.

Rhodes, McQuade

William Rhodes, 73, a Citigroup vice chairman, will give up his role as CEO of Citibank NA, the company’s primary banking subsidiary. He will “reduce his level of operating responsibility in order to focus more of his time on Citi’s international franchise,” Citigroup said.

Eugene McQuade, most recently a Merrill Lynch & Co. vice chairman, will replace Rhodes as CEO of Citibank. McQuade, 60, was formerly the chief operating officer of Freddie Mac and served as president of Bank of America Corp.

“The senior management changes I am making today will further help in positioning our company for the future,” Pandit, 52, said in the statement.

Shares of Citigroup, down 84 percent in the past year, climbed from less than $1 in March after Pandit said the bank was profitable in January and February. Citigroup rose 7 cents, or 2.7 percent, to $2.69 in New York Stock Exchange composite trading at 4 p.m.

Prior to joining the Carlyle Group in July 2007, Kelly was vice chairman of PNC Financial Services Group Inc. following PNC’s purchase of Mercantile Bankshares Corp. He was CEO of Mercantile from March 2001 through March 2007. He also held senior investment banking positions at what is now JPMorgan Chase and was a partner at the law firm of Davis Polk & Wardwell.

To contact the reporter on this story: Bradley Keoun in New York at bkeoun@bloomberg.net

Last Updated: July 9, 2009 16:16 EDT