“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.”
“This is a groundbreaking for Wall Street, banking and finance,” Mike Mayo, banking analyst at Wells Fargo, told CNN Business. “Citigroup is leading by example by adding diversity to the top of the firm when our country is crying out for this more than ever before. History has been made today.”
Fraser, a 16-year veteran of the bank, was made the heir apparent in October when Citi elevated her to the role of president.
In the public sector, Janet Yellen led the Federal Reserve, the most powerful central bank in the world, from 2014 to 2018. And even as Citi made its historic announcement, Christine Lagarde, the president of the European Central Bank, was briefing reporters during a press conference.
“I am honored by the Board’s decision and grateful to Mike for his leadership and support,” Fraser said in the statement. “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.”
Even though Fraser was the heir apparent, Wall Street was not expecting an imminent change at the top of Citi.
“The timing was unexpected. You don’t expect to change a CEO in the middle of a crisis,” Mayo said.
He suggested the timing reflects a recognition of Citi’s underperformance on key metrics, including expenses, returns and valuation.
Record-high female CEOs, but still a small percentage
“I look forward to seeing a woman being the first CEO of a Wall Street firm, whoever that may be,” Fraser told Harlow. “I’ve never had the ambition to be the CEO of Citi or any other organization. Things can change over time. But at the moment, I’ve still got a lot to learn.”
Citi’s share price is lagging behind
“I am extremely proud of what we have accomplished in the past eight years,” Corbat said in a statement. “We completed our transformation from the financial crisis and emerged a simpler, safer and stronger institution.”
Corbat noted that Citi’s net income nearly tripled during his tenure to almost $20 billion last year and the bank was able to return nearly $80 billion in capital through dividends and buybacks.
Even though Fraser has been a senior Citi executive for years, she is not that well-known among investors yet.
“Among shareholders,” Mayo said, “the jury is still out on whether she can take Citi to the next level.”