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The corporate world has long watched Citigroup with a mix of admiration and skepticism. Described as a “mishmash” organization caught in endless restructuring, the financial giant has lagged behind peers like JPMorgan in performance and shareholder returns. Now, under the leadership of CEO Jane Fraser, Citi is making headlines once again—but this time, Fraser insists, the transformation is real and enduring.
“Investors are right to be skeptical,” says Mike Mayo, head of US large-cap bank research at Wells Fargo Securities. “But this restructuring could create a multiplier effect—bringing greater ownership, accountability, and transparency.”
The Need for Change
For years, Citi’s performance has trailed its competitors. Its return on tangible common equity (ROTCE)—a key profitability metric—was just 7.3% last year, compared to JPMorgan’s stellar 21%. Shareholders have grown weary of lackluster stock performance, with Citi’s shares trading at about $64 in mid-2024—far below competitors like JPMorgan.
Despite the challenges, insiders note that Fraser’s plans, announced in September 2023, have begun shifting the narrative. The restructuring simplifies operations, dismantles bureaucracy, and aims to cut 20,000 jobs over two years. With ambitious cost savings of $51–$53 billion and a medium-term ROTCE target of 11–12%, Fraser’s strategy is bold.
A New Operational Model
Fraser’s plan reimagines Citi’s operations into five business lines—banking, services, markets, US personal banking, and wealth. The heads of these divisions report directly to Fraser, cutting through layers of bureaucracy that previously hindered agility.
“You don’t have to go through aggregated layers to get things done,” Fraser remarked during a Q1 2024 results call.
This shift includes revenue-sharing models that promote collaboration between divisions. The banking division, for example, has integrated investment, corporate, and commercial banking to streamline services and boost profitability.
“This isn’t just restructuring for the sake of it,” says Jason Rekate, global head of corporate banking. “It’s creating space for leaders to focus on clients rather than endless internal meetings.”
Investing in Strengths
Citi’s restructuring focuses on leveraging core strengths, particularly in its services division, which includes treasury and trade solutions (TTS). This business is a revenue powerhouse, contributing 51% of firmwide deposits in Q1 2024 and maintaining a 10% market share globally. Investments in TTS technology aim to sustain its competitive edge.
“Half of our revenue improvement comes from rates, but the other half is driven by stronger client activity,” says CFO Mark Mason.
Wealth management is another focus area. With 75,000 retail customers transitioning into wealth management clients last year, Citi is aligning efforts across divisions to enhance customer experience. This includes targeted initiatives in affluent urban markets like New York and San Francisco.
Challenges in Investment Banking
Despite progress, some areas, like investment banking, require further attention. While Citi saw a 35% year-over-year increase in investment banking revenue in Q1 2024, largely due to favorable market conditions, the division continues to lag behind peers.
Fraser has outlined strategies to address this, including growing market share in the US, focusing on high-value sectors like green technology, and deepening partnerships between investment and commercial banking.
A CEO’s Legacy in the Making
Fraser’s leadership has drawn praise for its clarity and decisiveness. Her push for a leaner, more accountable organization resonates with employees and analysts alike. Yet, questions linger about whether her strategies will yield long-term results.
“Fraser has the right strategy—focusing on core strengths and driving performance,” says Saul Martinez, head of US financials research at HSBC. “But her legacy depends on delivering consistent profitability.”
The Road Ahead
Citi’s transformation is far from over, but signs of progress are evident. The reduction of internal governance committees, a simplified structure, and a clearer focus on client needs are driving optimism. Still, the stakes remain high.
“Three years from now, Fraser could either be the banker of the year—or out of a job,” says Mayo bluntly.
For Citigroup, this restructuring is more than an operational overhaul—it’s a critical juncture. If Fraser succeeds, she may redefine not only Citi’s future but also what it means to lead in modern banking.
“The Citi of tomorrow will not look like the Citi of yesterday,” Fraser asserts. “It will be a bank defined by accountability, agility, and sustainable growth.”
Conclusion
Citigroup’s ambitious restructuring under Jane Fraser represents a pivotal moment in the bank’s storied history. By focusing on simplification, collaboration, and core strengths, Citi aims to reclaim its position as a leader in global finance. Whether Fraser’s vision will deliver remains to be seen, but for now, her bold approach is giving stakeholders a reason to hope.
