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Citi shakes up leadership as CFO Gerspach retires


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Citi shakes up leadership as CFO Gerspach retires

Citigroup Inc. CFO John Gerspach will retire in March 2019, ending a nine-year tenure for a key player in the company's postcrisis recovery.

Gerspach will be replaced by Mark Mason, currently CFO of Citi's institutional clients group. The memo also noted other leadership changes, stating that North America CEO Bill Mills and Europe, Middle East and Africa CEO Jim Cowles would be departing the company at the end of the year. Kristine Braden was named CEO Michael Corbat's new chief of staff. Braden was previously Citi's country officer for Switzerland.

Jeffery Harte, analyst at Sandler O'Neill & Partners LP, said that while high-level management changes usually raise red flags, he does not worry about major disruptions in Citi's momentum in the North America and EMEA regions. With regard to the CFO announcement, Harte said he will miss Gerspach's candor during earnings calls and investor presentations.

"He's always been kind of a straight shooter," Harte said in an interview.

Gerspach joined Citi in 1990, rising to controller and chief accounting officer. Gerspach was named CFO in the summer of 2009, in the midst of a tense postcrisis period that involved heavy regulatory scrutiny of leadership changes at hard-hit banks such as Citi.

Gerspach was Citi's steward through the flurry of new regulations imposed by the Dodd-Frank financial regulatory reform bill, and he steered the company's compliance with stress tests, living wills and other requirements. When Michael Corbat became CEO in 2012, Gerspach helped the company slim down its operations by divesting business lines and focusing on key sources of revenue such as its credit card businesses.

"He has played an unmatched role in crafting and executing a strategy to generate the returns our investors expect and deserve," Corbat said in a memo sent to Citi staff. Corbat added that Gerspach had been a key member of the company "not just in good times but in tough ones as well."

Analysts say they expected Gerspach to step down, noting that CFOs at the four largest U.S. banks tend to have short tenures in that position. Since 2013, JPMorgan Chase & Co., Bank of America Corp. and Wells Fargo & Co. have all on-boarded a new CFO.

"CFOs typically are ready to change, given the pressure and stress that they're under, every five to seven years," Vining Sparks analyst Marty Mosby said.

Gerspach's replacement, Mark Mason, has 17 years of experience with Citi and also has responsibility for Comprehensive Capital Analysis and Review submissions. Prior to serving as CFO of the institutional clients group, Mason was CEO of Citi Holdings, the company's "bad bank" with assets that it intended to shed after the financial crisis. Corbat said Gerspach's retirement on March 1, 2019, will allow the company to file its 2018 statements in late February, allowing Mason to step into the role at the start of a new financial reporting cycle.

Harte said he would expect Mason to be a "major mouthpiece" for Citi, as Gerspach was.