Citigroup CEO Jane Fraser has engineered a substantial turnaround for the bank over the past five years, moving it from chronic underperformance to recording its highest quarterly revenue in a decade in April. All five of Citi's divisions saw gains, with the bank's return on tangible common equity reaching 13.1% in the first quarter, its highest since 2021. Citi's stock has risen 83% since Fraser took office in 2021, outperforming rivals like JPMorgan Chase and Bank of America this year, although it slightly lagged the S&P 500's 8% growth. Analysts like Mike Mayo of Wells Fargo Securities credit Fraser's restructuring efforts for setting Citi on the right course, noting the removal of bureaucracy and red tape.
Fraser's turnaround strategy involved divesting non-core businesses, simplifying the organizational structure, and redirecting capital to more profitable divisions. She consolidated Citi's operations into five distinct business lines, reduced management layers from 13 to 8, and began exiting retail banking in 14 international markets. This includes shedding businesses in Russia, China, and Mexico. Fraser's approach, described as having the "ruthless precision of a seasoned McKinsey consultant," aimed to address regulatory reporting issues and instill a culture of crisp decision-making and discipline, replacing what she called a "culture of mediocrity."
The initial period of Fraser's tenure was challenging; she was the first woman to lead a major U.S. bank and faced a situation where Citi's stock had dropped 15% during her first year, trading below its book value. She also had to contend with a humiliating $900 million blunder. Despite these obstacles and the "glass cliff" phenomenon that often befalls female leaders tasked with difficult turnarounds, Fraser has stuck to her recovery plan. This has involved tough decisions, including the elimination of 20,000 jobs by the end of this year. She has also emphasized a cultural reset, urging employees to be judged on results rather than effort and to "get off the train" if not aligned with the overhaul. Citi is also investing in AI, with AI-assisted code reviews freeing up 100,000 hours of capacity per week for its engineering team.
