Citigroup Inc said on Monday Chief Financial Officer Sallie Krawcheck, one of Wall Street's most powerful women, is returning to her old job as head of its wealth management division. Krawcheck, 42, replaces Todd Thomson, 45, who is leaving to pursue other interests, Citigroup said.
Robert Druskin, who became chief operating officer last month, will run the wealth management unit until the biggest US bank finds a new CFO. The move returns Krawcheck, Citigroup's highest ranking woman and considered a potential future Wall Street chief executive, to her previous job, which in 2004 she swapped with Thomson.
Krawcheck had been chief executive of Sanford C. Bernstein & Co before joining Citigroup in 2002. Analysts were split on whether the latest job change is a demotion. "It's not a promotion if you think of it only as whether this puts her in line for CEO succession," said Henry Asher, president of Northstar Group Inc, which owns Citigroup shares. "It's probably good for the company to put her in a unit that suits her talents."
Wealth management comprises the Smith Barney brokerage, private bank and research unit. It is Citigroup's third-largest unit, after retail banking and corporate and investment banking. "Citigroup had billed the swap as a promotion for Krawcheck and Thomson, and now bills the switch back as a promotion for Krawcheck - it's like Lake Wobegon, where everyone's moving up," said Craig Woker, an analyst at Morningstar Inc.
"Putting her back in wealth management lets her succeed in a job she had proven successful in," he continued. "The real question becomes whether she still has anything to prove, and whether she sticks around."
Krawcheck had been the subject of speculation that she was unhappy with her job and might resign. "I'm looking forward to returning to an operating role at Citigroup," she said in a statement. In morning trading, Citigroup shares rose 58 cents to $55.08.
Chief Executive Charles Prince said Krawcheck did a "terrific job" as CFO, and joins wealth management "when one of our most important strategic priorities is to grow this business and have it work more closely with our other businesses."
Neither Prince nor Krawcheck was immediately available for further comment. "It's a lateral move at best," said Scott Armiger, a portfolio manager at Christiana Bank & Trust Co, which owns Citigroup shares. "The company recognises the need for management changes."
Last quarter, the wealth management unit posted a profit of $411 million on revenue of $2.72 billion, a respective 8 percent and 11 percent of Citigroup's totals. Another top woman executive at Citigroup, Marjorie Magner, stepped down as retail banking chief in 2005 amid concerns over the bank's direction. On Monday, Magner said she launched a private equity firm with Robert Willumstad, who was Druskin's predecessor as chief operating officer.
"Many women may watch this (Krawcheck's move) closely to see if this is a signal about women in management, or just a signal about this one," said Benson Rosen, a professor at the University of North Carolina's business school, who has studied women in management.
Before becoming CFO, Krawcheck was widely credited with restoring the luster of Smith Barney, which was tarnished in the Wall Street scandal over biased stock research. Citigroup becomes the third of the four largest US banks to replace its CFO in the last year, joining Bank of America Corp and Wachovia Corp.
Comments
Comments are closed.