By Dylan Tokar
Citigroup Inc.'s chief risk officer will depart as the bank works to overhaul its risk-management systems, the nation's third-largest bank said Monday.
Brad Hu, a 12-year veteran of Citigroup, will remain in his position until the end of the year to ensure a smooth transition, according to an internal memo by Chief Executive Michael Corbat and Jane Fraser, the firm's president and head of global consumer banking.
News of Mr. Hu's departure arrives a month after federal financial regulators fined Citigroup $400 million and ordered the bank to fix its risk-management systems, citing "significant ongoing deficiencies."
The decision to leave was Mr. Hu's, according to Citigroup. Mr. Hu, through a Citigroup spokeswoman, declined to comment.
Ms. Fraser is set to take over as CEO of Citigroup after Mr. Corbat retires in February.
"We respect his decision to align his own timing with the [chief executive officer] transition and his desire for the function to reset as Jane leads the management team on the firm-wide transformation that lies ahead," Mr. Corbat and Ms. Fraser said in the memo, which was viewed by The Wall Street Journal.
Ms. Fraser's role as head of global consumer banking will be filled by one of her top lieutenants, Anand Selva, according to the memo.
Citigroup said it will conduct a search for its next chief risk officer and that it will consider both internal and external candidates.
The bank praised Mr. Hu's accomplishments as chief risk officer, saying he helped reduce Citigroup's risk profile and guide the firm through geopolitical and economic disruptions. Mr. Hu also helped the bank respond to emerging risk areas such as climate change and cybersecurity, Citigroup said.
The Federal Reserve and the Office of the Comptroller of the Currency in October said Citigroup failed in various areas of internal controls and risk management, including data management, regulatory reporting and capital planning.
Longstanding concerns about Citigroup's internal risk systems were stoked when the firm inadvertently made a $900 million payment to creditors of cosmetics company Revlon Inc.
The OCC and the Fed have ordered Citigroup to form a new board committee to oversee the risk overhaul.
Write to Dylan Tokar at email@example.com
(END) Dow Jones Newswires
November 02, 2020 18:41 ET (23:41 GMT)Copyright (c) 2020 Dow Jones & Company, Inc.