NEW YORK (REUTERS) - Citigroup on Thursday (Sept 10) 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 that spans 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 she was 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 operations and technology chief Cathy Bessant. "A big and fantastic moment."
"Jane will become our first female CEO, a point of pride for all of us and groundbreaking for our industry," Corbat said, in an internal memo that was seen by Reuters.
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.
"I am a working mother. I always joke with my team and say I have three boys at home: I have a 14-year-old, a 16-year-old and a 59 year old," Fraser said in a speech in 2016.
Fraser launched her career as a 20-year-old at Goldman Sachs in its mergers and 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 US$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 per cent of annual revenue at the end of 2019.
Her name was floated last year as a potential CEO candidate at Wells Fargo & Co, before the board settled on former JPMorgan executive Charles Scharf.
In 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, a Citigroup veteran of 37 years, 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 per cent during his tenure, versus 63 per cent to 188 per cent 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.
In Thursday's memo, Corbat said Fraser was the right person to drive forward Citi's multi-year investments in infrastructure and controls.
"I know that you and Jane are up for the challenge," he said.
Corbat will officially hand the reins to Fraser in February, Citigroup said in a statement.