Citi CEO Michael Corbat will retire in February and be replaced by Jane Fraser, Citi's president and CEO of global consumer banking, the bank announced Thursday.
The transition means Fraser, who has been viewed as a potential replacement for Corbat since October, will become the first female CEO of a major U.S. bank. Fraser has served as the top executive in several of the bank's arms, including private banking, mortgages and the U.S. consumer and commercial banking businesses.
Corbat, who has spent 37 years at the bank, including eight as its CEO, will also step down from the board in February.
Fraser's upcoming appointment marks a significant milestone in the banking sector, an industry often chided for its lack of diversity at the top.
CEOs from seven of the country's largest banks, including Citi's Corbat, were asked during an April 2019 hearing in front of the House Financial Services Committee whether a woman or person of color would be a likely successor. None of the CEOs raised his hand.
Fraser, who has been at Citi for 16 years, served as CEO of the bank's Latin American operations before her promotion to the bank's No. 2 role in October, a transition many viewed as a steppingstone to the top job.
"It's a training ground to see if she's potentially the right person," Jeff Harte, an analyst at Sandler O'Neill said of her promotion in October. "To name her president, both Corbat and the board must see her as the right person to be CEO, but this will be her chance to prove it and get trained."
She was also reportedly approached for the top job at Wells Fargo before the position was filled by former BNY Mellon CEO Charlie Scharf in October.
When questioned about her potential to break the glass ceiling at a major U.S. bank, Fraser has remained conservative in expressing her ambitions.
"I look forward to seeing a woman being the first CEO of a Wall Street firm, whoever that may be," Fraser told CNN in 2018. "I've never had the ambition to be the CEO of Citi or any other organization. Things can change over time. But at the moment, I've still got a lot to learn."
In a statement Thursday, Corbat said he is "extremely proud of what we have accomplished in the past eight years."
Corbat said Citi's net income grew from $7 billion to nearly $20 billion during his tenure.
"Of course, there is always more to do and I believe the time is right for my successor to lead Citi through this next stage of progress," he said. "I have worked with Jane for many years and am proud to have her succeed me. With her leadership, experience and values, I know she will make an outstanding CEO."
John Dugan, chairman of the bank's board of directors, praised Corbat's leadership and said the board believes Fraser is "the right person to build on Mike's record and take Citi to the next level."
"She has deep experience across our lines of business and regions and we are highly confident in her," Dugan said. "Jane's ability to think strategically and also operate a business are a unique combination that will serve our company well."
Before joining Citi in 2004, Fraser was a partner at McKinsey & Co. She started her career in the mergers and acquisitions department at Goldman Sachs in London, and then worked for Asesores Bursátiles in Madrid.