Citigroup CEO Michael Corbat announced that he is retiring in February, and that the firm’s retail banking chief Jane Fraser will succeed him.
Fraser’s ascendance will make her the first female CEO of a major U.S. bank.
Corbat, who’s led the bank for eight years, was expected to serve two more years at Citi, according to the Wall Street Journal. Instead, Fraser, a 16-year veteran of the bank, will move from her position as bank president and head of consumer banking to claim the throne.
“We believe Jane is the right person to build on Mike’s record and take Citi to the next level,” Citi’s Chairman John Dugan said in a statement Thursday.
Fraser, 53 and a native of Scotland, has worked at virtually all of Citi’s key divisions during her tenure. She led the bank’s strategy division during the financial crisis, headed the Latin American divisions following a scandal, and most recently was the point person for Citi on the coronavirus pandemic in North America.
She’s also a known quantity in the mortgage space. In 2013, Fraser was tapped to head CitiMortgage in St. Louis. At the time, CitiMortgage – as was true with other banks – was heavily reliant on refinancings. Such loans accounted for 78% of applications across the country, but fell dramatically in the ensuing years.
“The day I started at CitiMortgage was the day the market started responding to the Fed, and inevitably was the end of the refi boom,” Fraser, who became CEO in May 2013, said in an interview with the Post-Dispatch.
With the drop-off in refinancing business, CitiMortgage spent much of Fraser’s tenure pivoting to purchase lending and cutting jobs and closing offices to reduce losses. More than 1,000 underwriter, sales, fulfillment and default jobs were cut in September 2013 alone.
The bank retreated from other corners of the mortgage space. Early in 2017, Citi announced it was leaving the mortgage servicing business.
Citi quietly returns
But in the last two years, Citi has begun to make noise again. In 2018, Citi formed a partnership with Digital Risk and Black Knight to form a single digital mortgage origination platform. A year later, it made an investment in Better Mortgage, believed to be $5 million.
In August 2019 Citi issued a $362.6 million mortgage backed security comprised of loans originated by Impac Mortgage Holdings.
And although it wasn’t among the 25 biggest residential mortgage lenders in the country in 2019, Citi increased its origination volume each quarter and ended the year with $16.9 billion in originations.