Citi’s 5-year comeback: How CEO Jane Fraser turned the bank’s chronic underperformance into decade-high revenue

20,000 layoffs, 14 markets exited, one flatter bank—Jane Fraser’s Citi playbook is working. Wall Street wants to know what’s next.

In a bubblegum pink bouclé skirt suit, Citigroup CEO Jane Fraser must have felt as if she was speaking into a void as she pitched Wall Street, via livestream, on the future she envisioned for one of the world’s largest banks.

It was March 2022. Fraser was a year and a day into her job. She was the first woman ever to lead a major U.S. bank. And Citi was in a bad spot: Its stock had dropped 15% during her tenure, lagging behind the S&P 500’s 10% growth. It was the only big U.S. bank trading below its book value. There also had been a humiliating blunder in which the bank sent $900 million to the wrong place and struggled to get it back.

To make matters worse, just hours before Fraser strode onstage for the bank’s first investor day in five years, Citi had suffered another indignity: Two executives had caught COVID, and the entire event had gone virtual. Fraser was forced to deliver her remarks into a camera, eyes trained on a teleprompter in the largely empty auditorium.

“We have an urgent need to address the issues that have kept our firm from living up to its full potential,” she said, then spoke bluntly: “It’s frankly not a surprise that we’ve been outperformed by our peers and that we failed to meet the expectations of our investors.” She vowed to change how the bank was run, instilling crisp decision-making and real discipline on execution and delivering results.

Unfazed, Fraser ticked through her recovery plan with the ruthless precision of a seasoned McKinsey consultant (she’s an alum). Her vision for Citi: to be the preeminent banking partner for institutions with cross-border needs; a global leader in wealth management; and a valued personal bank in our home market. Anything that didn’t serve these purposes may end up on the chopping block. And the bank’s culture of mediocrity had to change: “Good enough was good enough for far too long,” she said.

Fraser’s no-nonsense strategy for Citi was a demonstration of the new kind of leadership she was bringing to Wall Street: historical by definition and displaying a vulnerability that bucked the stoic boys’ club culture that had always dominated banking. Here was a CEO who, when I profiled her after her appointment was announced in 2020, talked about empathy, balance, and her desire for a personal and family life—alongside results; one who wore a fuchsia scarf to match her suit. As she told me when we spoke again this April: “I think you can make tough decisions. It does not mean you need to be an asshole.”

Five years into her tenure, the grades for Fraser’s turnaround plan are in: The new Citi is very much here. In April, Citi logged its highest quarterly revenue in a decade, with all five of its divisions recording gains, led by services and markets. The bank’s return on tangible common equity hit 13.1% in the first quarter, the highest since 2021. Citi stock is up about 83% since Fraser took over as CEO. It has risen 7.8% this year, ahead of rivals JPMorgan Chase, Wells Fargo, and Bank of America, but slightly behind the S&P 500’s 8% growth. And it has largely addressed regulatory reporting issues, and shed management layers and bureaucracy.

“Turnaround” can be a loaded term when it comes to female leaders. The well-documented glass-cliff phenomenon—in which boards turn to women when the cleanup job is exceedingly difficult or impossible—can be a trap for female execs who accept a no-win challenge.

Fraser’s CEO appointment looked at first as though it largely fit........

© Fortune