News Every Day | 13:00

Jane Fraser is nearly four years into her effort to transform Citi. Here's what you need to know about how it's going.

Jane Fraser has been Citi's CEO since March 2021.

Drew Angerer/Getty Images

Jane Fraser is on a mission to bring Citigroup back to its former glory.
Her strategy spans layoffs, hiring new leaders, and a multibillion-dollar firmwide initiative.
Fraser still has a long way to go on several fronts.

When Jane Fraser took over Citi in March 2021, she inherited a bank saddled with regulatory problems and outdated technology that lagged behind its other household-name peers.

This year's market headwinds have been kind to Citi's stock price, which is up 33% year to date, but Fraser's overhaul has a long way to go. Banker R. Christopher Whalen wrote this week of the numerous drags on Citi's performance, including high-interest expenses, large funding costs, and undersized non-interest income.

"It is a big positive that the market following for Citi has improved, yet the financial performance remains a struggle," wrote Whalen. "Citi management clearly want to grow into new areas, but our basic question is where can Fraser realistically take the bank?"

It's not for lack of trying. Fraser has brought in several new executives to right the ship, including JPMorgan's Vis Raghavan, PwC's Tim Ryan, and Merrill Wealth Management's Andy Sieg. In September 2023, Sieg joined Citi to fix its ailing wealth business. Should he succeed – and should Fraser falter – he has a chance of becoming Citi's next CEO. Sieg has made many changes to the leadership ranks with four of his original 14 direct reports departing and a total of at least 33 senior executives leaving within his first year.

Citi has added to its leadership ranks, promoting 344 managing directors in early December, its largest class under Fraser. However, these promotions come at a tense time for employees. The bank has kicked off its grueling annual review process that rates employees from best to worst. These rankings influence who gets promoted and who loses their bonus— or worse. There is greater stress over the process than usual as the bank has laid off 7,000 employees this year and plans to cut 20,000 jobs by 2026.

Perhaps Fraser's biggest challenge is satisfying regulators who have rebuked the bank. In July, two regulators fined Citi $135.6 million for failing to make enough progress in fixing its data-management issues. The bank had agreed in 2020 to work on this problem and others, including poor risk controls, after paying $400 million in fines to the Federal Reserve and the Office of the Comptroller of the Currency. The OCC said in July that the bank had made "meaningful progress overall" but that the agency wanted to ensure Citi allocated enough resources to address the "persistent weaknesses" regarding data.

These new fines are despite Citi dedicating billions of dollars to a firmwide initiative to overhaul the bank's technology. To run this "Transformation" project, Fraser picked Citi consumer-bank veteran Anand Selva, naming him as COO in March 2023. Eight current and former employees told Business Insider that they were surprised by his appointment given that he had never held a leadership role in technology or compliance.

Since the July fines, Fraser has tapped Ryan, the bank's new tech head, to lead the data effort alongside Selva. Still, she has been dogged by questions regarding the Transformation's progress or lack thereof.

That said, Citi might get some breathing room under Donald Trump's second presidential term. Trump has signaled he would cut down on oversight. In a speech at the Economic Club of New York in September, he pledged that if reelected, he would eliminate 10 rules for each new rule.

In a research note, Mike Mayo, a Wells Fargo analyst, called Trump's win a "regulatory game changer." He told BI that Citi was still in "regulatory purgatory" but that the bank would likely face less scrutiny for its data-quality issues.

If so, it would go a long way toward Fraser's legacy.