14 September 2020
Global banking major Citigroup on Thursday made history on Thursday by naming Jane Fraser as its next CEO. She will become the first woman to lead a major US bank.
Fraser, currently in charge of Citi’s consumer bank, will take over in February after Michael Corbat retires and steps down from Citi’s board of directors after 37 years at the bank, including last eight years as CEO.
Fraser, currently Citi’s president and CEO of global consumer banking, will succeed Corbat as CEO in February, and she has been elected to the board of directors, with service beginning immediately. Jane Fraser has been at Citi for 16 years and has been in her current roles since 2019.
Before taking over Citi’s consumer bank, Fraser led the bank’s Latin America division as well as its corporate strategy and M&A group. Fraser also led Citi’s private bank from 2009 to 2013.
Before joining Citi, Fraser worked at consulting major McKinsey and in the M&A department of Goldman Sachs.
Corbat said Citi has completed its transformation since the global financial crisis, emerging stronger and gaining significant share across markets and banking franchises. Citi, he said, has regained its place as a leader in banking.
“Our financial performance improved steadily and significantly during the eight years before Covid, as we kept our commitment to increase our return on and of capital to our shareholders. From 2012 to 2019, Citi’s net income increased from $7 billion to nearly $20 billion, and our return on tangible common equity increased from 5 per cent to over 12 per cent, closing the gap with our peers. We went from returning hardly any capital to returning nearly $80 billion in capital to our shareholders over the last six years.”
“I have worked with Jane for many years and am proud to have her succeed me,” Corbat said in a statement. “With her leadership, experience and values, I know she will make an outstanding CEO.”
John C Dugan, chair of Citigroup’s board of directors, said: “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.
He led with integrity and has been dedicated not only to the performance of the firm, but also to the well-being and growth of our people. He has helped make Citi a place where they are proud to work.
“We believe Jane is the right person to build on Mike’s record and take Citi to the next level. She has deep experience across our lines of business and regions and we are highly confident in her. Jane’s ability to think strategically and also operate a business is a unique combination that will serve our company well,” Dugan concluded.
“I am honored by the board’s decision and grateful to Mike for his leadership and support. The way our team has come together during this pandemic shows what Citi is made of. Our balance sheet is strong and our commitment to serving our clients and communities is even stronger. I will do everything I can to make all of our stakeholders proud of our firm as we continue to build a better bank and improve our returns. We will invest in our infrastructure, risk management and controls to ensure that we operate in a safe and sound manner and serve our clients and customers with excellence. Citi is an incredible institution with a proud history and a bright future. I am excited to join with my colleagues in writing the next chapter,” Jane Fraser said.
Citi, like all other banks, is struggling to make profit amidst high unemployment and low interest rates. Citi’s profit plunged 73 per cent during the second quarter as the bank’s credit costs spiked because of the pandemic.
Citi has lost one-third of its market value this year, lagging not just the S&P 500 but rivals, including JPMorgan and Bank of America (BAC).
Even though Fraser has been a senior Citi executive for years, she is not that well-known among investors yet. Her appointment as new CEO would also depend on shareholder interest.
Fraser is a member of the board of dean’s advisors at Harvard Business School, serves on Stanford University’s global advisory council and is a member of the Council on Foreign Relations. Jane has an MBA from Harvard Business School and an MA in economics from Cambridge University. She is married with two children.