Citigroup expects CEO Fraser's overhaul to drive 11% to 13% profitability
Citigroup's Profitability Targets and Strategic Overhaul
May 7 (Reuters) - Citigroup is expecting a key profit metric to range between 11% and 13% for 2027 and 2028, the bank said on Thursday, betting on CEO Jane Fraser's overhaul to drive stronger profitability.
Comparing New and Previous Profitability Goals
The new targets compare with Citi's goal of achieving an adjusted return on tangible common equity of between 10% and 11% for the year. The metric is an important industry figure that measures profitability on tangible assets.
Upcoming Investor Day and Medium-Term Goals
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.
Share Buyback Plan
The bank unveiled a multi-year $30 billion share buyback plan, expected to begin in the second quarter of this year.
Long-Term Profitability Projections
Citi also said it was expecting a return in the range of 14% to 15% in 2029 and 2031. Analysts had predicted ROTCE targets of up to 15% to 18% by the end of the decade.
Market Reaction
Shares of the bank were down 2.5% in premarket trading.
Focus on Fraser's Turnaround Plan
FOCUS ON FRASER'S TURNAROUND PLAN
Major Reorganization and Strategic Moves
Six years into her tenure, Fraser is heading her second investor day to present the results of a massive reorganization that shrank Citi by selling retail businesses worldwide, eliminating management layers and increasing risk and controls.
Share Performance Under Fraser
Since she took over in March 2021, Citi's shares have risen more than 80%. They are up more than 9% so far this year, compared with a 7.5% rise in the broader market.
Recent Financial Performance
The bank beat Wall Street expectations for first-quarter profit last month, raking in strong revenue from its trading business and also benefiting from robust dealmaking that lifted investment banking fees.
Quarterly Results
It posted an ROTCE of 13.1% in the quarter and reported its highest quarterly revenue in a decade at $24.6 billion.
(Reporting by Tatiana Bautzer in New York and Utkarsh Shetti in Bengaluru; Editing by Arun Koyyur)
