Citigroup Hires Morgan Stanley's Stewart for North American Retail Unit
Citigroup Inc., the bank 18 percent owned by the U.S. government, said it hired Morgan Stanley’s Cecelia “Cece” Stewart, a former Wachovia Corp. executive, as president of its North American retail bank.
Stewart, 52, joined Morgan Stanley in November 2008, when the securities firm was considering buying a commercial lender during the financial crisis. She had risen to executive vice president from branch manager during a three-decade career at Wachovia. Most recently, she ran Morgan Stanley’s private bank.
Her move may help Citigroup expand the North American consumer business under Manuel Medina-Mora, who replaced Teresa “Terri” Dial as the unit’s chief executive officer in January. Citigroup has slipped to fourth place by deposits in the U.S. after losing the 2008 takeover battle for Wachovia to Wells Fargo & Co.
“Wachovia bears the stigma of having almost failed, and rightfully so, but one thing they did right was their retail banking, and Cece was a big part of that,” said Nancy Bush, an independent analyst based in New Jersey who specializes in financial firms. Citigroup’s branch network has been “a bunch of cats and dogs stuck together,” Bush said. “That’s the attraction of Cece for them.”
Stewart will oversee U.S. retail banking, personal banking and wealth management, commercial banking and small-business banking, New York-based Citigroup said in a statement today. The heads of those four divisions will report to her, Medina-Mora said in a memo obtained by Bloomberg News that was confirmed by Citigroup spokesman Samuel Wang.
Paul Galant, CEO of the credit-card division, will continue to report to Medina-Mora, who in July announced plans for “multi-year investments” to develop the business. The bank’s North American consumer banking division, which also includes credit cards, said net income dropped 83 percent to $84 million in the first six months of 2010 from the same period in 2009.
Morgan Stanley, which had itself been in merger talks for Wachovia, instead bought a controlling stake in a venture with Citigroup’s Smith Barney brokerage and focused on building a private bank to offer lending and deposit services to wealth- management customers. Stewart led the bank’s push to offer more products such as jumbo mortgages and structured loans to Morgan Stanley Smith Barney clients.
Morgan Stanley has hired 113 bankers for the private bank, with plans to increase that to 500 over the next year, according to an internal memo dated today and obtained by Bloomberg News that was confirmed by spokesman Jim Wiggins.
To fill her post, Morgan Stanley named Shelley Hanan, the brokerage’s chief administrative officer, as acting head of retail banking, according to the memo. The bank will seek internal and external candidates for a permanent head, Jim Rosenthal, chief operating officer for the brokerage, said in the memo.
Citigroup also hired Morgan Stanley’s Will Howle, who had joined the firm with Stewart from Wachovia. He will serve as chief operating officer of U.S. retail banking.
Following Howle’s departure, David Kanigan and Chad Johnson, head of retail banking sales for the East and West Coasts, will report directly to Jonathan Witter, COO of the retail banking group, according to the Morgan Stanley memo. Johnson joined the firm in June from Bank of America Corp.’s Merrill Lynch brokerage.
Stewart began her career at Wachovia in 1978 as a branch manager in Raleigh and Cary, North Carolina, according to Wachovia. She holds a B.A. in psychology from the University of South Carolina, is an enthusiast for the horse show-jumping and in 2008 was named No. 33 on Fortune magazine’s list of the 50 most powerful women.