MAY 21, 2013 11:10am ET

Jane Fraser Replaces Sanjiv Das as CitiMortgage Chief

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Citigroup is replacing Sanjiv Das, the chief executive of its mortgage unit, with private bank head Jane Fraser.

Das, who took over CitiMortgage in 2008 and spent the past few years trying to drag it out of the financial crisis, is leaving the bank to pursue "other professional opportunities," Chief Executive Michael Corbat said in a memo to employees on Monday. Das is not quite finished helping Citigroup clean up its mortgage division; Corbat added that "Sanjiv has agreed to remain at Citi for the next few months and work with [Citibank CEO] Gene McQuade on mortgage issues related to the government."

That sort of cleanup operation has dominated much of Das' tenure at CitiMortgage, as the bank and its largest competitors have weathered the robo-signing scandal that led to a national mortgage settlement and a slew of other lawsuits and regulatory actions over soured loans and mortgage-backed securities.

"He was there at a very, very difficult time, steering the ship through problems he didn't create himself," says Cliff Rossi, a former chief risk officer for Citi's consumer lending group, who worked directly for Das for several months.

But Citigroup has stayed on the defensive for too long and is missing out on opportunities for new mortgage revenue after the crisis, argues Rossi, now a teaching fellow at the University of Maryland's Robert H. Smith School of Business.

In April, Citi Chief Financial Officer John Gerspach told analysts that the bank is "not looking to significantly grow share in mortgages," other than through making loans to its existing retail bank customers. That puts Citigroup, with its relatively small U.S. branch network, at a disadvantage to competitors like Wells Fargo and JPMorgan Chase, Rossi says.

"Citi actually needs to take a more assertive approach to how it builds its mortgage business, and that it has a valuable franchise that it needs to build," particularly through building up a stronger correspondent lending channel, he says. "In the last several years, as they've gotten whipsawed by the various settlements and lawsuits, they've been so distracted on the back end that they have not been focused on the front end."

Das was not immediately available for comment, a Citi spokeswoman said.

His exit is part of an ongoing management overhaul by Corbat, who abruptly replaced former CEO Vikram Pandit in October. Das' future at Citigroup has been the subject of speculation since then, as he worked with Pandit at Morgan Stanley and eventually followed him to Citigroup.

Now Corbat is giving new responsibilities to Fraser, another Citigroup veteran and an executive whose name regularly appears on shortlists of potential future Citigroup CEOs. She joined Citigroup in 2004 and was its global head of strategy and mergers and acquisitions before taking over the private bank in 2009.

"As CEO of the private bank over the past four years, Jane transformed the business, recruiting and developing top talent who helped the business deliver strong results and industry-leading efficiency ratios," Corbat said in the memo.

Fraser is also one of the most senior women at Citigroup, which has come under scrutiny for its male-dominated senior ranks. Last year, American Banker Magazine named her No. 11 on its annual list of the "Most Powerful Women in Banking."

Fraser will join Citigroup's operating committee in her new role, but she will report to co-president Manuel Medina-Mora instead of directly to Corbat. She was not immediately available for interviews, a Citigroup spokeswoman said.

Her role at the private banking unit will be filled by Mark Mason, who worked directly for Corbat and then succeeded him as CEO of the Citi Holdings repository for businesses the bank is trying to sell or wind down. His new assignment at the private bank is familiar territory to Mason, who previously was chief financial officer and head of strategy and M&A for Citigroup's former global wealth management unit. He will report to bank co-president Jamie Forese.

Francesco Vanni d'Archirafi will replace Mason as head of Citi Holdings, after four years as CEO of the bank's global transaction services unit. The massive corporate payments division is one of Citigroup's best revenue-generators, but his role was essentially eliminated in an April restructuring. In his new role, Vanni d'Archirafi will report to McQuade.

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