Citigroup (C) CEO Jane Fraser told investors Tuesday that the empire her bank built in the 1990s no longer exists.
“We are no longer the financial supermarket we used to be,” Fraser said at an event in New York City. “Instead, our vision is focused.”
Citigroup is scaling back its ambitions, divesting businesses and reducing its workforce as it tries to revive its stock price and eliminate decades of bloat.
The latest efforts to convince investors that things are moving in the right direction came Tuesday when Fraser and other bank executives held a series of investor presentations, mainly focused on its multinational services division, which helps companies move money around the world.
CFO Mark Mason called 2024 an “inflection year” in his presentation and said that by 2026, Citigroup plans to grow its full-year revenue by at least $6 billion while cutting costs by at least $500 million.
“We are committed to being the preeminent banking partner for institutions with cross-border needs, a global leader in wealth and a valued personal bank here in our home market,” said Fraser. “We have made significant progress.”
Citigroup shares rose on Tuesday. The index is up almost 17% since the beginning of the year and has outperformed a broader banking index (^BKX).
The makeover under Fraser, who took over in March 2021, began about two years ago as she sought to focus the company on serving large, multinational corporations, shed what was unprofitable and operate more efficiently.
This meant withdrawing from consumer banking in various parts of the world. It also meant cutting jobs and reorganizing business units as part of an internal restructuring that Fraser called the “most consequential” change in the way Citigroup operated in nearly two decades.
The strategy amounted to dismantling a ‘financial supermarket’ that claimed to offer all the services that consumers, businesses and governments needed.
The culmination of that model was an era-defining 1998 merger between Citicorp and Travelers, engineered by Sandy Weill. The deal broke down the crisis-era division between retail and investment banking and cemented Citigroup’s status as the world’s largest financial institution.
In the decades that followed, the Weill-built behemoth proved too complex and unwieldy to manage effectively, and the financial crisis of 2008-2009 dealt another blow to the company’s grand ambitions.
The company began to slowly phase out parts of the empire, a process that Fraser accelerated. She decided to exit Citigroup’s municipal bond and distressed debt businesses and reorganize the company into five divisions.
Fraser and her deputies spent much of Tuesday talking about one of those divisions — services — which Fraser has labeled the company’s “crown jewel.”
The division helps large multinational companies such as Amazon (AMZN), Alphabet (GOOG) and some governments manage or move money around the world.
These offerings can take the form of treasury and cash management, cross-border settlement, digital payments and securities services such as currency hedging. The division moves almost $5 trillion every day – the equivalent of Germany’s GDP.
“This is a company that drives global trade,” Fraser said. “No one else can compete with our global reach. No one else can match our products, our services and our digital capabilities, and no one else is bringing innovations to market at the pace we are.”
Both Fraser and Mason also acknowledged that the bank still has work to do to strengthen its supervisory and compliance functions.
On Monday, the Wall Street Journal reported that the FDIC is likely to vote Thursday to downgrade Citi’s so-called “living will” — a plan for winding down the bank in the event of a disaster — due to deficiencies in its data management systems. .
Fraser did not discuss the specific report, but said: “We recognize that there are places where progress has been too slow, so we have intensified our efforts in areas such as regulatory processes and related data cleansing.”
Mason added that “we will spend whatever it takes to execute the consent orders and modernize the business as this is an incredibly important body of work and critical to our long-term success.”
David Hollerith is a senior reporter for Yahoo Finance covering banking, crypto and other financial areas.
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