Citigroup Announces Historic Female CEO Appointment
Citigroup made history by naming Jane Fraser as its next CEO. She will become the first woman to head a major American bank.
Currently Jane Fraser leads consumer business Citi, and is due to replace in February Michael Korbat, which the plans to retire after 37 years work in a credit institution.
«I have worked with Jane for many years now and am proud to be my successor. With her leadership, experience and values, I am confident that she will become an outstanding CEO.», – said Korbat.
Fraser will take over management of a lending institution in a time of great economic uncertainty. All major US banks reported of a sharp decline in profits as they prepare for a wave of defaults due to the pandemic.
«This is a breakthrough for Wall Street, banks and the entire financial world», – said Mike Mayo, Wells Fargo banking analyst, interviewed by CNN Business.
«Citigroup is an example to follow. The Bank is bringing change and diversity to governance at a time when our country needs it most. History is happening before our eyes», – he added.
Jane Fraser follows in the footsteps of other high-profile women in finance. Sally Kravchek served as Senior Executive Officer of Citi and Bank of america during the 2008 financial crisis. Marianne Lake was hired as CFO JPMorgan Chase in 2012. In 2011 Beth Mooney took the lead KeyCorp, becoming first female CEO top 20 American banks. In the public sector Janet Yellen headed the Federal Reserve System from 2014 to 2018.
«I am honored by the decision of the Board of Directors and grateful to Mike for his support.», – Fraser said in a statement.
Although Fraser was the obvious candidate for the position of head of the bank, Wall Street did not expect such a change in the leadership of Citi.
«The very fact of the personnel reshuffle was unexpected. It’s strange that the bank was about to change the CEO in the midst of the crisis», – Mayo thinks.
He suggested that this decision was due to Citi’s lack of performance on key metrics including costs, profitability and valuation..
Before heading up Citi’s consumer business, Fraser led its Latin American business, as well as developing corporate strategy and participating in M&A discussions..
In an August 2018 interview with CNN, Fraser said she was looking forward to seeing the first woman to serve as CEO of a Wall Street company..
«I never had the ambition to become the CEO of Citi or any other organization. Things can change over time. But at the moment I still have a lot to learn», – she said two years ago.
«I am extremely proud of what we have achieved over the past eight years. We completed our transformation after the financial crisis and created an understandable, safe and strong financial institution», – he noted.
Citi’s net income tripled during his tenure to nearly $ 20 billion last year.
However, Citi, like other banks, is now grappling with the impact of unemployment and low interest rates.. Citi’s profit fell 73% in the second quarter as the bank’s lending costs rose sharply due to the pandemic.
Citi has lost a third of its market value this year, not only lagging behind S&P 500, but also from competitors including JPMorgan and Bank of america.
Although Fraser has been a senior executive at Citi for many years, she is not yet well known among investors..
«Market participants do not yet understand if it can take Citi to the next level», – noted Mayo.