Citigroup, once the largest and most valuable bank in America, has long been considered unmanageable and uninvestible by investors. However, under the leadership of Jane Fraser, the first woman to run a Wall Street bank, a remarkable turnaround seems to be underway. Fraser’s restructuring plans, which include cutting 20,000 jobs and simplifying the firm’s operations, have restored faith in the bank among investors. Citi’s share price has risen by more than 50% since September, signaling a potential shift in the bank’s fortunes.
Founded in 1998 with ambitions of being “everything to everyone, everywhere,” Citi’s previous strategies resulted in bloating and mismanagement, culminating in significant losses during the global financial crisis. Fraser’s decision to sell off consumer banks and streamline operations has paved the way for a new phase of restructuring. By focusing on core businesses and promoting competition among different divisions, Citi aims to improve performance and drive profits.
Fraser’s strategic hires, including executives from Bank of America and JPMorgan Chase, demonstrate her commitment to turning around underperforming sectors like banking and wealth management. Despite initial skepticism, investors have responded positively to Citi’s transformation, with the bank’s share price outperforming its peers in recent months. However, regulatory scrutiny and ongoing challenges in key business areas may present obstacles to sustained growth.
As Citi continues its journey towards recovery, Fraser’s emphasis on focusing on core strengths and building scale in key markets signals a shift away from its previous “everything to everyone, everywhere” approach. While the road ahead may still be challenging, there is a sense of optimism that Citi is on the right path to reinvention and success.
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