- Jane Fraser, Citigroup’s incoming chief executive, will step into the role in February, but made her debut in front of analysts on the firm’s quarterly earnings call Friday.
- Fraser struck a cautious note in referencing the significant regulatory and compliance hurdles the beleaguered global bank faces, but showed deference to her outgoing boss Mike Corbat.
- Corbat — who, next month, will conclude his tenure as CEO that began in 2012 — looked back on his accomplishments, listing a number of ways the bank has grown under his leadership.
- Visit Business Insider’s homepage for more stories.
The last time Wells Fargo analyst Mike Mayo turned up the heat on Citigroup, he publicly challenged outgoing chief executive Mike Corbat over why he didn’t simply throw in the towel right then and there.
“Why not step aside now and have the new CEO Jane Fraser take over as a way to demonstrate the increased sense of urgency?” Mayo asked Corbat in a scorched-earth question that ramped up tensions by a few degrees on the bank’s last quarterly earnings call in October 2020.
Prior to that call, Citi had been slapped with some expensive headaches, including a $400 million fine from the Federal Reserve and the Office of Comptroller of the Currency, in response to the bank’s regulatory and compliance issues.
Read more:The real reasons behind Citigroup CEO Mike Corbat’s retirement
Fast forward more than three months, and the Citi’s president and consumer-banking chief Jane Fraser is nearing the dawn of her tenure as CEO starting in February. She’s already ended up in analysts’ crosshairs.
On the bank’s fourth-quarter earnings webcast on Friday morning, Mayo questioned what will change under Fraser, invoking a five-decade history lesson to prove his point.
“You mentioned Citi being global, but despite this global status, Citi has fallen short of expectations in each of the past five decades,” the Wells Fargo analyst said to Fraser.
“You’ll be the seventh CEO of Citigroup when you take over,” Mayo pressed. “Why will it be different this time?”
For Fraser, this analyst call was an opportunity to debut her vision to the public. Since the announcement of her forthcoming promotion to CEO first broke in September, she’s largely stayed out of the spotlight.
“It’s pretty simple, really,” she said. “We’re a global bank. We want to be the leading global bank.”
To get there, Fraser will face some hurdles. One of which will be determining how to stitch together Citi’s massive global network in order to bring its infrastructure and compliance systems up to date. The specter of those challenges, and the regulatory pressures they incited, helped accelerate her predecessor’s departure.
Fraser said she had been taking time during the transition to “step back and to take a dispassionate look at our strategy and businesses.”
The promise of objectivity didn’t win Mayo over.
“You can take a clinical look, a dispassionate look,” he said, “but I’m extremely passionate about the underperformance of Citi over almost any timeframe over the last 50 years.”
All eyes were on Fraser on Friday
Early on in the call, Fraser set the stage for how she’d approach her tenure as CEO, identifying three objectives that will help shape her agenda.
“We ultimately want to achieve three things: position Citi to win, improve our returns significantly, and to address the issues raised by our regulators,” she said. “While it’s early days, our work on these priorities is well underway.”
But, when analysts began asking questions, Fraser turned, on several occasions, to a nebulous refrain: Give us time.
When Glenn Schorr, a senior managing director and research analyst at boutique investment bank Evercore, asked about Fraser’s plans for creating a “true global consumer platform” out of Citi’s patchwork international consumer-banking franchise, she reverted back to a variant of that answer.
“We’re just beginning the work on the strategy, and as I say, we’re taking a step back,” she said. “As we do that work, we will let you know what direction we’re going to be taking.”
“Let us do the work and then we’ll you know how everything fits together,” she said. “Let us do the work first.”
While Fraser left some questions unanswered, Corbat looked back at his tenure
Corbat has entered the twilight of his leadership at Citi, and he began Friday’s call by listing some of the accomplishments that defined his tenure as CEO since 2012.
“While there’s always more work to do, I’m very proud of what the firm has accomplished,” he said. “We’re at a fundamentally different place than we were in October of 2012.”
He named an acceleration into digital banking, improving the quality of the bank’s earnings, and returning more than $85 billion in capital to shareholders since 2013 as defining attributes of his time.
In terms of philanthropic contributions, he highlighted the firm’s announcement in June that it had pledged more than $100 million to COVID relief, and its commitment in September to designate more than $1 billion in funds to narrow the racial wealth gap and uplift communities of color.
“As a result of the pandemic, while the financial results this year aren’t what I would’ve wanted them to be for my last year as CEO, in many ways I couldn’t be prouder,” he said. “All the work we did to strengthen our firm helped us get through this extraordinary year, and I’m proud of the fact that we’ve shown we can go through a crisis and emerge even stronger.”
As Citi’s leadership transition approaches, the bank has begun to announce some changes, more of which will undoubtedly be forthcoming.
On Wednesday, Citi announced that it would consolidate the wealth management teams within its consumer banking and institutional clients groups into a single division: Citi Global Wealth. Meanwhile, Fraser’s successor in Citi’s consumer bank, Anand Selva, announced leadership changes.
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