The Most Powerful Woman in Banking 2024: Citigroup's Jane Fraser

From the start of her tenure as CEO of Citigroup , Jane Fraser has warned that turning around one of the largest, most-complex banks in the world would be neither a quick nor direct journey.

So when regulators scolded the bank in July for not moving faster to fix risk management-related issues — and levied more fines against the New York bank as a punishment — Fraser owned up to the slow progress and doubled down on a commitment to fix the problems, no matter the cost.

"We will get these areas where they need to be, as we have in other areas" of the overhaul, Fraser said in a statement at the time. "We've always said that progress wouldn't be linear, and we have no doubt that we will be successful in getting our firm where it needs to be."

Fraser's frankness and persistent confidence have become her hallmark traits as CEO of Citi, the $2.4 trillion-asset megabank that she's trying to revamp into a simpler, more-profitable firm. She's making progress, including selling or winding down international consumer franchises, reducing the company's management layers and making investments in risk management.

Analysts repeatedly give Fraser, a Scottish-born consultant-turned-banker with a hankering for playing practical jokes, credit for making decisions that prior Citi CEOs didn't or couldn't make. And she's doing it amid difficult regulatory, geopolitical and macroeconomic backdrops.

"She hasn't been afraid to shrink to profitability," said Gerard Cassidy, an analyst at RBC Capital Markets. "There are those who say, 'Grow, grow, grow' and 'You've got to get bigger,' but she was able to step back and say growth for growth's sake and big for big's sake isn't going to fly."

For the fourth year in a row, Fraser is American Banker's Most Powerful Woman in Banking. She's Citi's first female CEO and the only female CEO among the 50-largest U.S. banks.

Fraser is a prominent voice in the industry and across the corporate world generally. She sits on the boards of the Business Roundtable, a group of CEOs of large U.S. companies, and the Council on Foreign Relations. She is vice chair of both the Partnership for New York City and the Financial Services Forum, which includes CEOs from the nation's eight-largest financial institutions. She is a member of Harvard Business School's Board of Dean's Advisors, the Stanford Global Advisory Board and the Economic Club of New York.

Fraser's day job involves running an organization, whose roots go back 212 years, that has a physical presence in 90-plus countries and, as of late June, employed 229,000 people across the globe. In the past year, she has led Citi through substantial changes, including management delayering and rounds of layoffs that will ultimately reduce the workforce by 20,000 by late 2026.

She has drilled down on Citi's five core businesses — markets, services, wealth, business and investment banking and U.S. consumer banking — and hired external executives to lead some of those businesses. Under her direction, the company has honed in on reducing expenses and elevating its return on tangible common equity ratio to between 11% to 12% by the end of 2026.

For 2023, the company reported a return on average tangible common equity ratio of 4.3%, down from nearly 9% the prior year. For the first and second quarters of 2024, that ratio was 7.6% and 7.2%, respectively.

Analysts agree there's a lot of work left to do to turn Citi around. For starters, it needs to keep working through regulatory issues and improving its data governance and risk management processes, said Saul Martinez, an analyst at HSBC Global Research who upgraded Citi's stock in January from "hold" to "buy." The company must also keep expenses in check and improve the profitability of wealth, markets and U.S. consumer banking in particular, he said.

"I guess the overlay is, is revenue improving? Are they improving profitability in these business units?" he said. "Is there tangible progress toward seeing better business unit performance?"

While the Federal Reserve and the Office of the Comptroller of the Currency cited Citi this summer for violating a pair of 2020 consent orders related to risk management and internal controls and assessed more fines, Ebrahim Poonawala, an analyst at Bank of America Securities, said it's worth noting that acting Comptroller of the Currency Michael Hsu said in a press release that Citi's "board and management have made meaningful progress overall."

Hsu "didn't need to say that," Poonawala said. "He chose to point that out, which is public affirmation that [Fraser] is making progress and de-risking this company."

Still, for many investors and observers, Citi remains a "show me" story, Poonawala said. There is skepticism about whether Fraser and her management team will be able to hit their financial targets and position the company to better compete with its big-bank peers, he said.

"To me, the big thing is the challenge of how tall of a task this is and how different her execution has been compared to the past two decades," Poonawala said. "I have not seen a better plan than what she's executing on."