Citigroup's Jane Fraser to become first woman to head a Wall Street bank

(Reuters) – Citigroup Inc (C.N) on Thursday named consumer banking head Jane Fraser to succeed Michael Corbat next year as the bank’s chief executive officer, making her the first woman to lead a major Wall Street bank.

Fraser, 53, has been a rising star in the financial industry, with a career spanning investment banking, wealth management, troubled mortgage workouts and strategy in Latin America – a key business for Citigroup.

Her promotion to CEO was widely expected since being elevated to Citigroup president last year, and was celebrated as a step in the right direction for an industry that has few women or diverse executives in its top ranks.

“Great news for the company and for women everywhere!” tweeted Bank of America Corp (BAC.N) operations and technology chief Cathy Bessant. “A big and fantastic moment.”

Citigroup shares were nearly flat in morning trade.Indeed, Fraser joins a small group of women who have broken through the glass ceiling to reach the C-suite at major financial firms.

In addition to Bessant, there is Fidelity Investments CEO Abigail Johnson, JPMorgan’s consumer lending head Marianne Lake and its finance chief Jennifer Piepszak, and Alison Rose, CEO of British bank NatWest.

Fraser launched her career at Goldman Sachs in its mergers & acquisitions department in London and then worked for Asesores Bursátiles in Madrid. She joined Citigroup 16 years ago and is credited internally with helping the bank recover after the financial crisis, when it had to take $45 billion in taxpayer funds to survive.

Through the years, she has run client strategy in Citi’s investment bank, as well as its private bank, its mortgage business and its operations in Latin America, which accounted for 14% of annual revenue at the end of 2019.

Her name was floated last year as a potential CEO candidate at Wells Fargo & Co (WFC.N), before the board settled on former JPMorgan executive Charles Scharf.

October, Fraser was promoted to the role of president and tasked to head its global consumer bank, a move that was widely seen as a precursor to her elevation.

Credit Suisse analyst Susan Roth Katzke said the promotion came sooner than expected, and that investors are eager to get an audience with her. “Investors will need to hear more from Jane, sooner rather than later,” she said.

CORBAT’S LEGACY

Corbat was launched into the CEO role in 2012, when his predecessor suddenly left under pressure from investors.

Since then, he has shifted Citigroup’s strategy to focus on corporate businesses where it has strengths, like fixed income trading and cash management, as well as credit cards and digital consumer banking.

He also wound down a huge book of troubled assets known as Citi Holdings, effectively transforming the bank from a bailed out, money-losing entity with operations spanning the world into a slimmer, more profitable version with targeted global operations.

Citigroup’s profits more than doubled under Corbat since 2012, but rival banks have done better and its share price has lagged as a result.

Only recently has the bank been able to meet performance targets Corbat set years ago, and its shares have risen just 43% during his tenure, vs 63% to 188% for Wall Street peers.

To be sure, Citi also had to issue more shares than peers to survive the financial crisis, which also hurt its performance.

He will officially hand the reins to Fraser in February, Citigroup said in a statement.

“We believe Jane is the right person to build on Mike’s record and take Citi to the next level,” said John C. Dugan, Chair of the board of directors at Citi.

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