Citi's 'groundbreaking' move; JPMorgan orders traders back to the office
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One giant step for a woman
Citigroup president Jane Fraser was named to succeed Michael Corbat as CEO when he retires in February, “making her the first woman to lead Citigroup or any other major Wall Street bank,” the Wall Street Journal said. “Ms. Fraser’s promotion is a huge step for women in the banking business. The industry’s top ranks remain stubbornly male, despite efforts to recruit and elevate more women. Men run the major Wall Street banks and they always have.”
“The succession was teed up by the Scottish woman’s appointment as Citi’s president last year, which insiders said was a precursor to her ultimately becoming chief executive of the bank,” the Financial Times said. “Jane will become our first female CEO, a point of pride for all of us and groundbreaking for our industry,” Corbat said.
“Ms. Fraser’s ascension is groundbreaking on Wall Street, which has never quite shaken off its longstanding reputation as a boys club, with men dominating the upper ranks of banks and other financial firms, despite efforts to recruit and promote more women,” the New York Times added.
“I will do everything I can to make all of our stakeholders proud of our firm as we continue to build a better bank and improve our returns,” Fraser said in a release. “We will invest in our infrastructure, risk management and controls to ensure that we operate in a safe and sound manner and serve our clients and customers with excellence.”
Citi “still faces some familiar challenges,” the Journal said. “The bank’s earnings outlook depends in large part on when it can stop adding loan-loss reserves and start releasing them, and when it can accelerate lending growth again. That, in turn, depends on consumers and their credit cards.”
“As a veteran of many of the bank’s businesses, Ms. Fraser is well-suited to maximize Citigroup’s long-term potential by figuring out how best to exploit digital banking and wringing maximum revenue out of its vast global footprint in money flows. But Wall Street probably won’t give her much credit for any of that until the bank is clear of near-term risks in cards.”
Fraser’s appointment “was a cause for celebration in an industry that has struggled with gender equity,” the FT added, but Citigroup’s stock edged lower after the announcement, “underscoring the challenges facing the 53-year-old Fraser when she is scheduled to take over the bank in 2021. After years of weak performance, Citigroup investors seem less concerned with who is in charge than what remains to be done.”
Fraser “faces pressure to improve Citi's profitability metrics and stock market valuation while steering the $2.2 trillion-asset company through lingering fallout from the coronavirus pandemic,” American Banker’s Allissa Kline reports.
Kevin Wack looks back at the good and not-so-good under Corbat.
Back to the office
JPMorgan Chase workers in the bank’s “giant sales and trading operation must return to the office by Sept. 21, according to people familiar with the matter,” the Journal reported. “By fully reopening its trading floor, the bank is sending a message to its employees—and its competitors—that it is now safe to return. JPMorgan, which is building a new skyscraper in Midtown Manhattan, has been more aggressive than some of its peers about bringing workers back to the office.”
“The call to return to JPMorgan’s tower blocks in Canary Wharf in London and midtown Manhattan in New York comes against a backdrop of falling Covid-19 cases in the two cities which were once the pandemic’s global epicenters,” the FT said.
The Justice Department said “it had charged 57 people with trying to steal more than $175 million from the Paycheck Protection Program as questions swirled about how its funds were disbursed,” the New York Times reported. Brian C. Rabbitt, the acting head of the department’s criminal division, “said that the 57 cases ranged from loan requests for $30,000 to about $24 million, and that cases had been brought across the United States.”
Some cases involved “individuals or small groups, acting on their own, who lied about having legitimate businesses or who claimed that they needed P.P.P. money for things like paying workers or paying bills, but instead used it to buy splashy luxury items for themselves.”
“Experience has taught us that any time the federal government makes a large amount of money available to the public on an expedited basis, the opportunities for fraud are unfortunately clear,” Rabbitt said at an online press conference.
One of those busted is a National Football League player, Joshua J. Bellamy of the New York Jets. Bellamy “is currently on the team's reserve/physically-unable-to-perform list, not on the active roster.”
How low can you go?
The average rate on a 30-year fixed-rate mortgage fell to 2.86% this week, “its lowest level on record. The 30-year fixed rate has not been this low since Freddie Mac began tracking mortgage rates in 1971. It surpassed the previous low of 2.88%, set last month. This is the ninth time since March that the 30-year fixed rate has fallen to a new record.”
“It’s about time. Kudos to Citi for recognizing the talent and giving her the opportunity and letting her grow.” — Heidi Miller, “a former top executive at JPMorgan Chase who was once seen as a potential successor to Jamie Dimon,” on Jane Fraser being named the next CEO of Citigroup.