Citigroup President Jamie Forese to Depart, Ybarra Promoted
Forese was considered a potential successor to CEO Corbat.
(Bloomberg) -- Citigroup Inc.’s Jamie Forese, long considered the potential successor to Chief Executive Officer Michael Corbat, is departing after 34 years at the firm.
Forese, 56, was the company’s president and head of the division that contains its investment banking and trading units, the Institutional Clients Group. Paco Ybarra, his deputy, will take over leadership of ICG, according to an internal memo.
Forese, who was named Citigroup president in 2013, had struggled to have his voice heard on strategy for the sprawling consumer division, which includes the world’s largest credit-card issuer, according to a person familiar with the matter. His disappointment grew after Corbat wasn’t elevated to the chairman role last year when Mike O’Neill left, a move that could have boosted Forese’s influence, said the person, who asked not to be identified discussing personnel issues.
“We are relatively surprised by Jamie Forese’s decision to retire given his relatively young age,” Brian Kleinhanzl, an analyst at Keefe Bruyette & Woods Inc., said in a note to clients. “We’ll be interested to understand Paco’s revenue growth plan since reported revenue growth in ICG has been lackluster over the past five years.”
At ICG, Forese oversees Citigroup’s markets unit, its investment bank, private bank and one of the world’s biggest transaction-services businesses. The division generated about half of the lender’s approximately $73 billion of revenue in 2018.
Under Forese, ICG revenue has increased more than 10 percent as he focused on the so-called accrual-type businesses, such as private banking and cash management. That’s helped it counter a years-long slump in fixed-income trading, the biggest division inside ICG.
“Under Jamie’s leadership, our core accrual businesses have generated consistently strong revenue growth, and we’ve continued to gain share in our markets-related businesses,” Corbat, 58, said in the memo. “We would not be the company we are today without his stewardship.”
The firm’s consumer division in recent years has been criticized by Wall Street analysts as it continually missed internal targets. The unit has started to show signs of a turnaround as the bank rolled out new digital-banking tools and turned its focus away from promotional credit-card offers.
Assist in Transition
Ybarra will take the helm of the institutional division beginning May 1, and Forese plans to assist with the transition through the summer, Corbat said in his memo to employees. Ybarra was named Forese’s deputy in October, just one month after Forese shuffled his top lieutenants in the investment bank.
Carey Lathrop and Andrew Morton will become co-heads of markets and securities services, taking on Ybarra’s duties, according to the memo. Lathrop, based in New York, oversaw the bank’s credit-trading unit until last year, while London-based Morton runs the G10 Rates business, which deals in products tied to interest rates.
“Our leadership team has undergone a good deal of change over the last year,” Corbat said in the memo. “While we will miss the experience and counsel of those who have moved on, I believe that change is healthy and creates new opportunities for our firm and our people.”
Salomon Veteran
Forese joined the Wall Street brokerage Salomon Brothers in 1985 and was named a managing director in 1992, prior to its acquisition by Citigroup, according to a biography on the lender’s website. He took over the bank’s equities group in 2003 before becoming chief of all trading in 2007 as the financial crisis loomed.
While Forese helped Citigroup’s investment bank recover from the financial crisis and repay a $45 billion taxpayer bailout the company needed to survive, his division faced other problems in the wake of the crash. The bank had to pay billions of dollars to settle allegations that it rigged interest rates and currency markets across the globe and misled investors about the quality of mortgage-backed bonds.
Francisco Aristeguieta, who helps lead Citigroup’s Asia Pacific unit, is also leaving, according to the company memo. He will be replaced by Tim Monger on an interim basis. A spokeswoman for the bank in London confirmed the memo’s contents.
Citigroup Exits
With Forese and Aristeguieta’s departures, eight of Citigroup’s 14 executive officers as of last February have left or announced they’re leaving. John Gerspach, the bank’s longtime chief financial officer, retired last month, while Bill Mills and Jim Cowles, who ran the bank’s North America and its Europe, Middle East and Africa businesses, respectively, left in December.
This month, Barbara Desoer retired as CEO of Citibank N.A., the primary entity the bank uses to engage in banking activities. Mike Murray, head of human resources, and Don Callahan, Citigroup’s operations and technology chief, decided to leave a year ago.
In the past year, Wall Street has seen the departures of some of its biggest leaders, many of whom rose up through the investment-banking and trading businesses that have been under pressure.
Morgan Stanley President Colm Kelleher, once seen as a potential successor to CEO James Gorman, said last month he’ll leave at the end of June. Bank of America Corp.’s Christian Meissner left the company in September after running its corporate and investment-banking division for most of a decade. And Goldman Sachs Group Inc. has also lost several senior executives, including former Co-President Harvey Schwartz and trading co-heads Isabelle Ealet and Pablo Salame.
To contact the reporters on this story: Donal Griffin in London at dgriffin10@bloomberg.net;Jenny Surane in New York at jsurane4@bloomberg.net
To contact the editors responsible for this story: Ambereen Choudhury at achoudhury@bloomberg.net, ;Michael J. Moore at mmoore55@bloomberg.net, Daniel Taub, Steve Dickson
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