(12 January 2021 – United States) Incoming Citigroup CEO Jane Fraser has clarified how she plans to reposition the group for growth and committed to improving disappointing shareholder returns.
In February 2021, she will become the first female CEO of a major Wall Street bank, overseeing an enormous global bank operation with over 200,000 employees spread across 100 countries and a market value over US$110 billion. Fraser, a 53-year-old Scot who had been named the bank’s president in 2019, is open to realigning key business divisions, selling off underperforming business lines and simplifying the US$2.3 trillion-asset company that has been criticised for spreading too thin across too many offerings, resulting in a major global consolidation as conducted by HSBC in recent years.
Citi reported a return on equity (ROE) of 5.9 percent for Q4 2020, trailing JPMorgan’s 12 percent and Wells Fargo’s 6.4 percent. Bank of America will report quarterly earnings next week however its Q3 2020 ROE was 7.2 percent.
Some measures are already in motion as Citi announced the consolidation of two wealth management units into a single global division, bringing wealth management services for the ultrawealthy under the same umbrella as services for substantially less affluent consumers while also announcing a leadership reorganisation of its US retail bank.
“What we’re looking at, at the moment, is much more around what we want to be going forward and where we are in the work is looking at the different businesses and how do they best fit together. If it ends up that there are businesses we look at that we don’t think fit well into the mix, then I think we’ve got good skills in terms of thinking about how we divest of those in a way that makes sense” incoming Citi CEO Jane Fraser stated.
“The work in figuring out what fits and what doesn’t is just beginning. We're taking it a step back and CFO Mark Mason and I are working on a dispassionate view of all of the businesses and looking at what are the leading franchises we want to invest behind, what are the others that we want to grow to win. And as we do that work, we will let you know what's the direction we're going to be taking” Fraser added.