Citi becomes first big Wall Street bank to be run by female CEO

Citigroup has become the first major Wall Street bank to appoint a female chief executive, announcing on Thursday that Jane Fraser will succeed Mike Corbat.

The succession was teed up by the Scottish woman’s appointment as Citi’s president last year, which insiders said was a precursor to her ultimately becoming chief executive of the bank, whose $2.2 trillion (€1.8 trillion) balance sheet makes it one of the world’s top lenders.

“There is always more to do,” said Mr Corbat, 60, who will hand over the reins in February, adding that he believed “the time is right for my successor to lead Citi through this next stage of progress”.

Ms Fraser’s appointment is also a moment for Wall Street, which remains male-dominated in its top ranks. At a congressional hearing last year seven bank bosses, including Mr Corbat, failed to raise their hand when asked whether their likely successor was a woman or person of colour.

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Mr Corbat spent eight years as chief executive of the lender, taking over from Vikram Pandit in the aftermath of the financial crisis.

Citi, which required one of the biggest bailouts in the crisis, has struggled to rebuild itself. It was hurt by owning a much smaller consumer bank at a time when investors preferred the stability of retail banking to the volatile profits of capital markets and investment banking. Uneven results from its large operations in international markets such as Mexico also weighed on returns.

Underperformance

Citi’s relative underperformance, despite its highly respected global franchise, attracted the attention of ValueAct, an activist investor, which took a $1.2 billion position in late 2017.

Still, Citi’s net income more than doubled under Mr Corbat’s time at the top, from $7 billion in 2012 to $20 billion in 2019.

"The board deeply appreciates Mike's many contributions to Citi, and he will leave the firm in a much stronger position than he found it," said chairman John Dugan.

A former partner at McKinsey, Ms Fraser, 53, is already one of Wall Street’s most senior women, having spent 16 years at Citi and headed its consumer bank since last year. Before that, she headed Citi’s Latin American business.

Colleagues praise her leadership skills and strategic thinking, as well as her fondness for practical jokes.

"We expect to see a smooth transition with the new CEO . . . in the spring and believe she is well qualified to be the new CEO," said Gerard Cassidy, analyst at RBC.

– Copyright The Financial Times Limited 2020