Boring Bankers Replace ‘Masters of the Universe’
There are few bankers running Wall Street institutions these days who hark back to the big brash era before the financial crisis.
Mike Corbat's elevation to succeed Vikram Pandit as Citigroup's next chief executive adds another methodical financier to a growing group of low-profile bank bosses.
Over the past couple of years boring bankers have taken over from high-octane predecessors at Italy's UniCredit, UBS in Switzerland, Barclays in Britain and now at Citi, once the world's largest bank.
Citi's new boss epitomises the new breed of straightforward commercial bankers that is replacing their "masters of the universe" peers from the investment banking realm. A New Englander with textbook charm and a calm manner, Mr Corbat has spent the past three years doggedly working through Citi's earlier and ill-advised expansionism — first as head of Citi Holdings' "non-core" unit and more recently as the man charged with reining in the bank's sprawling operations in Europe, the Middle East and Africa.
Investors may be heartened by the departure of bankers associated with the generous remuneration of the pre-crisis era — such as Mr Pandit and former Barclays boss Bob Diamond – heralds the beginning of a more modest pay culture.
They may also hope that chief executives such as Mr Corbat at Citi and Antony Jenkins, the retail banker who took over at Barclays, will simplify and shrink their complex businesses into more profitable operations.
The omens are not promising. Under the low-key Federico Ghizzoni, UniCredit has struggled to recover from the over-expansion of his predecessor. And there are few signs that the rise of former equities banker Sergio Ermotti at UBS is paying off.
Reining in risk can mean lower returns.