Jane Fraser, who runs one of the world's most complex banks, isn't afraid to make changes.
Since her promotion to chief executive officer of $2.4 trillion-asset Citigroup in March 2021, she has taken several decisive steps to simplify and modernize the sprawling megabank, all with an eye toward reaching the ultimate goal: closing Citi's long-standing stock valuation gap with peers.
Thus far during her tenure, Citi has scaled back overseas retail operations and doubled-down on high-growth-potential businesses like
In May, Citi halted
Fraser is "making decisions that other [Citi CEOs] were not," Piper Sandler analyst Scott Siefers said.
"My own impression of Jane is that she is the one who, by a wide margin, has been the most willing to make tough decisions that are perhaps unpopular and will be very difficult to execute," Siefers said in an interview. "But she's the one who's had the fortitude to do it and she's executing on it."
For the third consecutive year, Fraser is American Banker's Most Powerful Woman in Banking.
The first woman to lead Citi — or any major U.S. bank — Fraser has become a leading voice in the industry, a fact that was on display when she used her high-profile platform to tout the U.S. banking system after the abrupt failures of Silicon Valley Bank and Signature Bank in March.
Her involvement includes serving on the board of directors of the Business Roundtable, an association of CEOs of major U.S. companies, and the Council on Foreign Relations, a think tank in New York City. She is also vice chair of the Financial Services Forum, an advocacy group whose members are the CEOs of the eight largest financial services companies in the country.
"Our banking system as a whole is very strong," Fraser said during Citi's first-quarter earnings call, about a month into the 10-week-long banking crisis. "While a small handful of institutions still have challenges to overcome, the U.S. financial system remains unmatched globally."
Some observers following Citi's "
"I view Jane in some regards as an internal activist," said Ebrahim Poonawala, an analyst at Bank of America Securities. "For the first time since [former CEO] Sandy Weill stepped down, you have someone taking an objective view of the franchise and trying to make sense of why they're doing certain things, where they're doing certain things and does it make sense?"
Under Fraser's leadership, Citi — which operates in 95 countries and employs more than 240,000 employees worldwide — has exited the majority of the 14 overseas retail franchises that were deemed too small for Citi to effectively compete. It continues to wind down retail operations in
Last year, Citi became the first big U.S. bank to eliminate overdraft fees. It also exceeded and
The company has set 2030 emissions reduction targets and committed $1 trillion to sustainable finance by the same year, including environmental, healthcare and affordable housing projects.
In a move that was foreshadowed at the firm's investor day in March 2022, Fraser is also cutting management layers across the organization in an effort to eliminate complexity. In September, she scrapped Citi's two main operating divisions, which eliminated the need for individual heads of those divisions, and promised similar reductions in management layers across the company. The overhaul will result in job cuts, though the exact numbers and impacts of such cuts aren't expected to be known until January.
"Today's announcement is, indeed, about putting that … big, next step in place and initiating it," Fraser said at an industry conference where she described the changes. It is a strategy "to not only put the organization model that best fits our strategy in place," but also run "the bank differently" and drive "clearer accountability for doing so."
For 2022, the company earned nearly $15 billion in net income and reported a return on tangible common equity of nearly 9%, setting Citi up to achieve its medium-term target of 11% to 12%. The company returned more than $7 billion to shareholders, up from $4 billion the year before.
While there have been several wins with Fraser in charge, analysts are quick to acknowledge that the job of rehabilitating an enterprise as large as Citi is difficult. Over the next few years, the analysts said, the work includes lowering expenses, raising capital, working through the IPO for Banamex and addressing all of the regulatory concerns outlined in the consent orders.
The company expects to "bend the curve" on expenses by the end of 2024, Fraser has said.
"I think investors shouldn't be too quick to judge whether she's doing a good job as she's only two-and-a-half years in," Poonawala said. "But Citi is getting to the point where in the next two-and-a-half years, they'll have to show us that this thing is working."
For her part, Fraser seems undaunted by the tasks at hand.
"Everywhere you look around the firm, there is an undeniable sense of momentum," Fraser told shareholders at Citi's virtual annual meeting in April. "We've never been clearer about the bank we want to be and we've made significant progress over the past year making it happen."
