Wall Street's Toughest Turnaround
Bloomberg Businessweek|October 18 - 25, 2021
Jane Fraser is rethinking Citigroup and what it means to work at a megabank
Jenny Surane

One of Citigroup Inc.’s more serendipitous real estate investments turned out to be the roof deck it built into its renovated downtown New York headquarters. With sweeping views of the Hudson River, it’s a thoroughly ventilated space that investment bankers and traders can slip away to for some socializing or after-hours cocktails. Not a bad perk for those back in the office in the midst of the lingering pandemic.

Kicking back at a patio table, Jane Fraser, Citigroup’s newly installed chief executive officer, is discussing one of her first wins on the job. Early in the summer she broke with bank CEOs who were cajoling workers back to their desks just as the delta variant of Covid-19 was spreading, leading to infections that forced them to revise their plans again. She’s taken a more relaxed approach, mostly letting employees decide when they want to return. While this sounds warm and fuzzy, it’s also a weapon for recruiting and retaining talent.

“I want to crush the competition,” Fraser says, sipping her coffee. The first woman CEO of a top U.S. bank makes it easy to forget she’s assumed one of the toughest jobs in global finance. Citigroup’s stock price is languishing below the levels it notched a bit more than three years ago, even as some of its U.S. peers’ shares sit near record highs. Fraser says she has a plan to reshape the bank, starting in its wealth management and global consumer businesses.

She’s trying to turn around the original banking behemoth—one that investors think has grown too complicated, with the wrong mix of businesses and a lot of baggage. The modern Citigroup was bolted together in the 1990s by Sandy Weill, who persuaded Congress to repeal the Depression-era law that had separated federally insured deposit-taking banks from riskier Wall Street businesses. Then, in true Titanic fashion, Citigroup showed why that’s dangerous. Slammed by losses tied to bad mortgages and other distressed holdings in 2008, it required more U.S. taxpayer support than any other bank in the financial crisis. Fraser’s predecessors spent much of the following decade whittling down an $800 billion pile of bad and unwanted assets.

Of the six major Wall Street banks, Citigroup is the only one trading for less than the net value of its assets per share, a common measure of a bank’s worth. Even so, it’s a formidable player. It operates in more than 160 countries, moves $4 trillion in payments a day, and houses the world’s largest credit card issuer. Regulators deem it one of the three most systemically important banks on the planet.

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