Jane Fraser’s Citi overhaul delivers decade-high quarterly revenue

Citigroup’s five-year restructuring under CEO Jane Fraser is showing clearer financial results, Fortune reported, with the bank posting its strongest quarterly revenue in a decade in April. The performance matters because Fraser took over a bank long criticized for weak returns, tangled management and regulatory problems.

Fraser became CEO in 2021, making her the first woman to lead a major U.S. bank, according to Fortune. By March 2022, Citi’s stock had fallen 15% during her tenure while the S&P 500 had gained 10%, and the bank was trading below book value, Fortune reported.

At Citi’s 2022 investor day, Fraser told investors the bank had fallen short of expectations and needed sharper execution, Fortune reported. She laid out a narrower strategy: focus on institutional clients with cross-border needs, wealth management and U.S. personal banking.

That plan has reshaped the company. Fortune reported that Citi grouped its operations into five business lines, reduced management layers and began leaving consumer banking in 14 international markets. The bank also plans to cut 20,000 jobs by the end of this year as part of the overhaul.

The financial markers have improved. Fortune reported that Citi’s April quarter produced its highest revenue in 10 years, with all five divisions growing. Return on tangible common equity reached 13.1% in the first quarter, the strongest level since 2021.

Citi’s shares are up about 83% since Fraser became CEO, according to Fortune. The stock had gained 7.8% this year at the time of the report, ahead of JPMorgan Chase, Wells Fargo and Bank of America, though slightly behind the S&P 500’s 8% rise.

Wells Fargo Securities analyst Mike Mayo told Fortune that Fraser’s reorganization may prove to be the most consequential change at Citi when judged over a decade. Mayo said the flatter structure removed places for managers to avoid accountability.

Fraser’s approach has also carried costs and controversy. Fortune reported that Citi has defended wealth chief Andy Sieg after a former managing director accused him of harassment in a January lawsuit; the bank said the suit lacked merit. Citi also defended banking head Viswas Raghavan after Fortune reported he had previously faced bullying allegations at J.P. Morgan, calling him a proven leader.

Fraser has pressed employees for stronger performance. Fortune reported that she told staff in January that effort would no longer be enough and that results would drive judgment. In 2023, she urged employees who did not support the overhaul to “get off the train,” according to Fortune.

The next test is growth. Fortune reported that investors entered Citi’s May 7 investor day looking for evidence that the bank could move beyond repair work. Citi’s medium-term target of 14% to 15% return on tangible common equity by 2031 initially disappointed investors, and the stock fell in premarket trading.

Fraser told investors Citi’s five business units could reinforce one another by serving the same clients across payments, markets, banking, private banking and cards, Fortune reported. She also said AI-assisted code reviews had freed 100,000 hours of engineering capacity per week.

Citi shares ended that investor day up 1.2%, according to Fortune. Fraser told Fortune she had listened to employees, investors, clients, regulators and the board, and said that work strengthened her conviction that Citi’s cross-border strategy was the right path.

This story draws on original reporting from Fortune.