Citi CEO Mike Corbat to retire, Jane Fraser to take over as first female boss
Michael Corbat, the chief executive of Citigroup, is set to retire from the US banking giant after 37 years and will be replaced by consumer banking boss Jane Fraser, making it the first major Wall Street bank to have a female leader. Corbat will step down from the board of directors from September next year, according to a statement from the bank, marking the end of his eight-year tenure at the helm of one of the biggest lenders in the world. Fraser, who has worked for the bank for 16 years, is currently Citi's president and chief executive of its vast consumer banking business. Corbat took over the top job at Citi in 2012, helping steer the bank out of a tough period after it was hobbled during the 2008 financial crisis. A lifer of the bank, he joined as a graduate 37 years ago and has risen through the ranks. “Jane will become our first female CEO, a point of pride for all of us and groundbreaking for our industry,” he said. Corbat took the helm at Citi from Vikram Pandit, who had led the firm through the financial crisis and was forced to make painful changes after the bank was left with billions in toxic assets. Citi received a $45bn government bailout, while Pandit hived off its underperforming units into a so-called bad bank that unwound $800bn worth of assets and saw 100,000 employees depart within two years. Fraser takes over the top job at a tumultuous period for the industry, as large US banks have booked billions of dollars in loan loss provisions as they brace themselves for the fall out from Covid-19. In the second quarter of 2020, Citi’s net income slipped by 73% to $1.3bn as earnings slumped across Wall Street. Fraser’s career spans Goldman Sachs and strategy consultant McKinsey & Co, and straddles investment banking, consultancy and retail banking. She joined Citi in 2004 in its corporate and investment bank, rising to global head of strategy and mergers and acquisitions in 2007 and then chief executive of its private bank in 2009. She then led its US consumer and commercial banking unit for two years until 2015 when she was promoted to chief executive of its Latin American business - the last role she held before stepping up president and head its consumer unit globally in 2019, essentially putting her in place as Corbat’s number two. Fraser said in a statement: “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 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.” Citi is the first major US bank to promote a woman into the top job, even as its rivals have cited the bench of female talent that could step up into the CEO role when any changes take place.
Barclays makes equity unit co-heads permanent after former boss abruptly left for Citi
Barclays confirmed its new global co-heads of equities into the top job, around four months after the abrupt departure of its former boss to Citigroup. The UK lender named Todd Sandoz and Paul Leech as its permanent co-heads of global equities, according to a person familiar with the matter, having appointed them as interim heads in May. Barclays had continued to search for a permanent successor to Fater Belbachir, who quit for Citigroup in May after around 10 months leading equities trading at the UK lender. He became global head of Citi's stock trading unit as part of a broader shake-up of the division, Financial News reported.
The UK lender's markets division has surged this year as the coronavirus crisis has spurred volatility across stock and fixed income markets during the first half of 2020. Barclays' equities division was among the top performers over the period, posting a 26% increase in revenues on the same period last year to around £1.2bn. Sandoz, who is based in New York, joined Barclays in May 2018 to lead its equities trading unit in the Americas, having previously spent around a year and a half managing his own money. Before that, he was head of global equities and execution services at Nomura and also spent over 17 years in top trading jobs at Credit Suisse. Leech, meanwhile, spent over 25 years at JPMorgan, where he was a senior figure in its equity derivatives unit. He joined Barclays in January to lead its equities trading division in Europe.
Brevan Howard Says Smith, Hornick, Abbou, Candy Are Joining
Brevan Howard announced four appointments to its global business development team, according to a statement. Natalie Smith, formerly with Commonwealth Asset Management, joined in New York as Head of Strategy with a “client-focused mandate to deliver the optimal investor experience in the areas of directional and relative value macro investing”. Peter Hornick, formerly with Exodus Point Capital Management and Millennium Management, joined in New York as Head of Business Development for Brevan Howard Alpha Strategies (US) with responsibility to build the portfolio management team for this strategy in North America.
David Abbou, formerly with Bluecrest Capital Management, joined in Geneva as Head of Trading for Brevan Howard Alpha Strategies (Europe) with a mandate to manage and develop the European portfolio management team across a number of strategies. Jonathan Candy, formerly with Graticule Asset Management and Bluecrest Capital Management, joined in Singapore as Co-CEO of the local business unit to focus on both client service and portfolio managers across Asia.
Balyasny recruits ex-Citadel PM as head of ED credit
Balyasny has hired a former Citadel Partner to lead its event driven credit offering. The Firm, launched in 2001 by Dmitry Balyasny, named in the role George Klavdianos earlier this month. He joins as head of event driven credit following nearly seven years at multi strategy hedge fund giant Citadel. Klavdianos began his career at Citadel as a portfolio manager. He spent three years and seven months at the firm before joining $312bn asset manager Apollo Global Mgmt in May 2007. He spent just over two years at the firm as a PM before joining London based asset manager Panthir Capital as a partner. Klavdianos spent just under four years with Panthir before rejoining Citadel. It is not clear which office Klavdianos will join or if he will build out a new strategy.
Centenus returns external AuM and rejoins Millennium
Millennium Mgmt has onboarded a long/ short equity hedge fund which was previously seeded by Izzy Englanders multi-strategy giant. CIO Sara Nainzadeh mover her Centenus Global Mgmt - a hotly tipped launch in 2017 - to Millennium in the third quarter, becoming an internal trading team at the $45bn hedge fund. New York-based Centenus was already running a separately managed account for Millennium alongside a commingled fund, but it was operating as a standalone investment firm open to external investors. Now, according to sources, is trading only Millennium's capital after handing back outside money, although it is understood that Centenus is keeping its name. The fund, which was backed by Millennium with $600m, saw its assets decline during the market sell-off in March. According to filings, Centenus' regulatory AUM dropped from $859m in October 2019 to $581m at the end of the first quarter. Centenus transferred its entire team to Millennium, although it is understood that it's CCO Bruan Philips moved to biotech focused Avoro Capital earlier this month.
Banks’ trading results are expected to normalize in the third quarter and second half of this year, KBW analyst Brian Kleinhanzl wrote in a note. Executives’ outlooks have mirrored what’s been seen in 3Q market data so far, KBW said, with “modestly better y/y performance and a sequential decline;” he added that there may be “positive momentum” into quarter-end if a recent spike in volatility were to continue. Sees total 3Q trading revenue up modestly y/y and down q/q from a “historic” second quarter; sees average U.S. bank rev. +2.8% y/y, average European bank -3.6%. Sees average U.S. bank equities rev. -1.1% y/y; average European bank -10.5%. For FICC, sees U.S. banks’ rev. +8.8%, European banks -0.3%. Noted trading revenues represented a “meaningful portion” of total rev. in 2019 for GS (41%) and MS (33%), and made up a “lower, yet still significant,” portion for C (21%), JPM (18%), BAC (14%). Big bank stocks slipped premarket Thursday, with JPMorgan down 0.2%, Citigroup -0.4%, BofA -0.1%. The KBW Bank Index (BKX) has tumbled 32% this year and the KBW Regional Bank Index (KRX) has fared even worse, falling 36%, while the S&P 500 has rallied 5.2%.
