Citi Beats JPMorgan to Shatter Wall Street’s Glass Ceiling

In an earnings call in January, JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon was in a great mood. He had just overseen the best year ever for a U.S. bank, cementing it as the king of Wall Street. And yet, even after that performance, he was asked about succession planning and his timeline to step down.

He shrugged it off. “My statement stays the same — it’s five years,” the 64-year-old billionaire said, echoing a sentiment from almost six years prior. “When and if we ever set an actual retirement date, we’ll let you know.”

The question was less about Dimon and more about those who were waiting in the wings. In April 2019, the biggest U.S. bank shuffled the duties of two of its top female executives, Marianne Lake and Jennifer Piepszak, both 49 at the time, in what was largely seen as putting the right women into place to take over when Dimon’s “five years” were up. As Bloomberg News’s Michelle F. Davis noted, the move put JPMorgan ahead of just about every top rival in setting the stage to elevate a woman to CEO, something that’s never happened at the six largest U.S. banks. 

As usual, it looked as if Dimon and JPMorgan would be ahead of the pack. 

Michael Corbat and Citigroup Inc. had other ideas.

The bank announced on Thursday that Jane Fraser would become its next CEO, effective in February. She will succeed Corbat after he spent more than eight years at the helm and said last October that he remained “committed to leading our firm in the coming years.” Fraser, who joined Citigroup in 2004, will immediately join the board.

While it’s not a complete shock — Fraser effectively ascended to second-in-command about 11 months ago, in what was seen as training to become CEO — that doesn’t diminish the significance of the fact a woman has now officially been named to lead a Wall Street behemoth. After all the shuffling and positioning and posturing over the years, Citigroup has finally taken a hammer to one of the most-glaring glass ceilings in the finance world.

Fraser, 53, has qualifications that are second to none. Part of the reason she was named president and handed responsibility for consumer banking at Citigroup last year, in fact, was likely because she was mentioned among potential candidates to run Wells Fargo & Co. or HSBC Holdings Plc. It says a lot that within three years of joining Citigroup, she was promoted to global head of strategy. That, of course, was right around the financial crisis. In 2009, she moved to lead the private bank. In 2013, she was named CEO of the mortgage unit. Less than a year later, she was promoted to run the broad U.S. consumer and commercial banking businesses, giving her valuable experience in interacting regularly with regulators and board members.

As Fraser tells it, she was never really gunning for CEO of Citigroup or any other Wall Street firm. In a 2018 interview with CNN, she said her role at the time came with the benefits of running a large bank without all the potential criticism. “I look forward to seeing a woman being the first CEO of a Wall Street firm,” Fraser said. “Whoever that may be.”

Citigroup faces any number of challenges in the months and years ahead. It’s the world’s largest credit-card issuer, which poses a unique set of risks as the number of Americans who consider themselves permanently unemployed steadily climbs. The bank has also been in the headlines lately for an embarrassing $900 million mistaken payment to Revlon Inc. lenders, which it blamed on human error. And as for the bottom line, Citigroup’s returns still trail those of JPMorgan, the industry’s undisputed leader.

But as for the historic milestone of promoting a woman to CEO, Citigroup has JPMorgan and the rest of its global banking rivals beat. When Dimon ultimately retires to make way for Lake, Piepszak, both of them, or another female executive, it will still be a big deal on Wall Street. But at least a bit closer to normal, as it should be.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.

©2020 Bloomberg L.P.

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