Jane Fraser took the top role at Citigroup one year ago.
Kyle Grillot/Bloomberg
In its first investor day in nearly five years, executives from Citigroup will outline a three-phase plan to streamline operations and improve returns according to slides released ahead of Wednesday’s presentations.
The plan comes one year after Jane Fraser became chief executive of the global institution. Fraser knew she had tough work ahead before her tenure began. Months before she took the helm, the Federal Reserve and the Office of the C
omptroller of the Currency said the bank had weak internal controls, issued a consent order, and fined the bank $400 million. The move from regulars came soon after Citigroup (ticker: C) erroneously wired $900 million to creditors of Revlon. Before that, investors had been frustrated that Citigroup had missed targets it set for itself.
Phase one of Citi’s plan tries to address those criticisms from regulators. The bank says it will lay the groundwork for future success, namely by investing in technology and digital client solutions.
In phase two, which should come three to five years from now, Citigroup expects to see improved returns as its prior efforts materialize. By then, the bank said it expects to have a return on tangible common equity in the range of 11% to 12%, a target that was widely anticipated by Wall Street analysts.
In the last phase, Citigroup expects to emerge as a leaner organization with expenses normalized following a period of investing in transformation. To use the bank’s words, it aims to be the “preeminent banking partner for institutions with cross-border needs, a global leader in wealth management and a valued personal bank in our home market.”
While Wednesday’s full-day presentation marks an unveiling of its strategy, the bank has been making incremental progress over the past year to achieve its goals. It is now thinking of itself as five interconnected businesses covering the needs of institutional clients, businesses, and households.
Last year Citigroup announced plans to exit its retail banking operations in 13 markets and has clear paths to exit eight of those divisions. It also said it would be exiting its consumer, small business, and middle-market banking operations in Mexico. These moves came as Citigroup was also submitting transformation plans to regulators, improving its risk controls, adjusting compensation plans to be better aligned with shareholders.
Citigroup’s stock slid 0.2% in premarket trading ahead of the presentation.
Write to Carleton English at [email protected]
