(New York) A year after taking the helm of the American bank Citigroup and beginning to offload certain activities, Jane Fraser presented on Wednesday a new strategy aimed at improving the performance of the establishment while warning that it would take time .
Posted at 12:13 p.m.
The presentation did not seem to have convinced investors frankly, the action of Citigroup falling 3.7% at the start of the session on Wall Street in a rising market.
The company has set a new target for return on tangible equity, an important indicator in the world of finance, of 11% to 12% over the next three to five years.
PHOTO ERIN SCOTT, REUTERS ARCHIVES
Citigroup CEO Jane Fraser during an address to the Brazil-United States Business Council, held in Washington on March 18, 2019. She was at the time responsible for Citigroup’s business in Latin America.
This is a little better than the 8.9% achieved in 2021, if the reduction in reserves set aside at the start of the pandemic to protect against possible defaults by its customers is not taken into account.
But in its last presentation to investors in 2017, the bank promised 14% over the long term.
Jane Fraser admitted that the bank was underperforming its competitors, which investors have already noted: Citigroup’s stock is about the same as it was five years ago, when Goldman Sachs rose by nearly 50%, that of JPMorgan Chase nearly 60%, and that of Bank of America more than 85%.
To simplify its activities, Citi has already announced during the past year to withdraw from retail banking activities in 14 countries, including Mexico.
The company will continue to assess its portfolio, but “now we are focused on execution,” said Jane Fraser.
The establishment wants in particular to expand its banking services to medium-sized companies, strengthen its wealth management activity, detailed the boss during a presentation to investors.
While the bank was sanctioned in 2020 by regulators for its poor risk management, it is also taking steps to improve this aspect of its business, including investing in new technologies.
“The change in the balance between our different activities will take time to show its results,” warned Jane Fraser. And we must also take into account the mistakes of the past.
“In the longer term, when our work begins to bear fruit, we obviously have the ambition to increase our output,” she said.
In the immediate future, the group wants to “build its credibility”, underlined the manager.