Jane Fraser’s appointment as Citigroup’s CEO in 2020 sparked hopes that more women would become chief executives at the country’s largest banks.
Just over three years later, those aspirations have yet to be realized. In fact, the trend line has moved in the opposite direction. Fraser will soon be the only woman CEO at the country’s 50 largest banks by assets.
When Citi announced in September 2020 that Fraser would take the helm, there were three women in the same group: Kelly Coffey of City National Bank, Nandita Bakhshi of Bank of the West and Ellen Alemany of CIT Group. Coffey’s tenure as head of City National is set to end this month. Both Bakhshi’s and Alemany’s departures came after their banks were acquired by competitors.
Coffey’s exit marks the end of her almost five years at the helm of City National, which is a unit of Royal Bank of Canada. Fifth Third Bancorp veteran Howard Hammond is set to replace her this month. Coffey will move to a newly created role as CEO of the Los Angeles bank’s entertainment division.
The decline in women CEOs, even if temporary, underscores the challenges facing women looking to reach the top spot at banks industrywide. Women employees often shoulder an outsize amount of responsibility in parenting and household management, which can hinder them from reaching the next rung of the corporate ladder. The end result is a lack of women candidates to choose from when a CEO role becomes available.
“As you get up to higher levels, more and more is required, but there isn’t a social structure or social net that helps women take on more responsibility to be able to get those roles,” said Maria-Gabriella Khoury, a senior director at Fitch Ratings who has researched the gender imbalance in bank leadership roles.
The share of women in C-suite positions at financial services companies rose to 17.9% globally in 2022. That figure is up from 12.1% in 2012, according to a 2023 Deloitte report. But the pace of growth is expected to slow over the next decade. About 21.8% of C-suite positions will be held by women in 2031, according to the Deloitte forecast.
The picture is a bit brighter at credit unions. Women hold slightly more than half of leadership positions at credit unions, according to a 2018 report by the Credit Union National Association, but the institutions they run are more likely to be smaller in size than the credit unions run by men.
“Over the past decade in financial services, more women have been added to the C-suite than men, and women are definitely getting more positions globally, but the progress is super-slow,” said Stephany Kirkpatrick, CEO of the financial technology startup Orum.
To be sure, the decline in women CEOs at some of the country’s largest banks could be short-lived. Ally Financial is looking for a new head to replace CEO Jeffrey Brown, who said last month that he would leave the bank early next year. At JPMorgan Chase, the co-CEOs of the bank’s enormous consumer banking unit, Marianne Lake and Jennifer Piepszak, are seen as top contenders for the CEO role when Jamie Dimon retires.
The experience that Lake and Piepszak have in running one of the bank’s key profit centers makes them uniquely qualified to serve as CEO, Khoury said. JPMorgan’s sprawling consumer business accounted for 45% of the bank’s revenue of $40.7 billion in the third quarter, according to regulatory filings.
“A lot of people who get to those C-suite roles come from within the bank,” Khoury said. “This is where the crux of the issue is — getting enough talent in the pipeline to reach those roles.”
But few women enter the C-suite as chief financial officers or chief operating officers, the roles often carved out for potential successors to the chief executive, according to Deloitte’s findings. Instead, women are more likely to break into a bank’s highest level of management via roles that weren’t traditionally part of the C-suite, such as chief human resources officer or chief compliance officer.
In fact, more women have accessed the C-suite via non-traditional than traditional C-suite roles in recent years. About 21.1% of executives in non-traditional C-suite roles in 2022 were women, up from 14.3% in 2012, according to Deloitte. The increase in women holding traditional C-suite roles over the same time frame was less pronounced. Women held about 16.8% of traditional executive roles in financial services in 2022, up from 11.6% in 2012.
When she took the helm at Citi, Fraser acknowledged the progress yet to be made in diversifying the upper ranks of bank leadership.
“We must break down the barriers that hold back women of color from fulfilling their potential,” Fraser said in an interview with American Banker shortly after her appointment. “We must use our influence to open doors for the next generation.”
The lack of non-white women in executive roles is particularly relevant to the banking industry, where close to one in four entry-level employees are women of color. Just one in 20 C-suite executives are women of color, according to a McKinsey study on gender and race gaps in financial services.
