Citigroup bets on CEO Fraser’s overhaul to aim for 11% to 13% profitability

CITIGROUP is targeting an adjusted return on tangible common equity of 11 per cent to 13 per cent for 2027 and 2028, the bank said on Thursday, betting on CEO Jane Fraser’s overhaul to drive stronger profitability.

The new targets compare with Citi’s ambition of achieving an ROTCE between 10 per cent and 11 per cent this year. The metric is an important industry figure that measures profitability on tangible assets.

The announcement comes ahead of Citi’s investor day on Thursday, where the bank is expected to lay out medium-term goals for its businesses. Analysts had predicted ROTCE targets of up to 15 per cent to 18 per cent by the end of the decade.

Six years into her tenure, Fraser is heading her second investor day to present the results of a massive reorganisation that shrank Citi by selling retail businesses worldwide, eliminating management layers and increasing risk and controls.

Since Fraser took over in March 2021, Citi’s shares have risen more than 80 per cent. They are up more than 9 per cent so far this year, compared to an about 7.5 per cent rise in the broader market.

Last month, the bank beat Wall Street expectations for first-quarter profit, raking in strong revenues from its trading business and also benefiting from robust dealmaking that lifted investment banking fees.

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It posted an ROTCE of 13.1 per cent in the quarter and reported its highest quarterly revenue in a decade at US$24.6 billion. REUTERS