Jane Fraser plans to take Citi to 4 strategic hubs
Jane Fraser, who took over the leadership role at Citi just this February, has surprised the world with her bold decision to exit 13 key consumer markets:
Jane Fraser, who took over the helm at Citigroup just in February and who created major ripples in the banking world when she announced her bold strategic move to exit some of the major global markets, was in fact an understudy of former Citigroup CEO Vikram Pandit and the latter had immensely contributed in shaping her work philosophy. She narrates how a piece of advice from Pandit influenced her actions that ultimately got her the coveted position: “One day, Pandit invited me to share my career goals. I duly presented him a sheet of paper mapping out my promotional aims and the skills required to achieve them. Pushing back the paper, Pandit told me: ‘You’ve got to think about how do you collect and gather the experiences that will make you successful in the role, not the experiences that will get you to the role’. That was a game-changing piece of advice for me ... I started doing completely different jobs and ones that weren’t necessarily logical.”
She had said before taking over the CEO’s position that she hopes to instil that overarching attitude among her workforce.
Fraser, who spent 6 years working parttime at McKinsey & Co, before coming on board Citi, had during her 16 years there performed diverse roles within the group’s investment and private banks, as well as its mortgage business and headed its operations in Latin America. She claims the diversity in her career had given her exposure to the operations, technologies and risks of a range of business areas.
BOLD DECISIONS
On her very first day in the CEO’s office, she pledged that Citigroup would achieve netzero GHG emissions by 2050. And going by her past performances, this is quite achievable, say Wall Street analysts, as she has come to be known as a leader who ‘gets stuff done’. She had studied at the University of Cambridge and got a MBA from Harvard and had worked with Goldman Sachs and McKinsey. Her admirers describe her ‘ ferocious work ethics’ yet reluctant to sacrifice her personal life to get to the top. She took up part-time consultancy at McKinsey to bring up her kids.
She has now made it clear that she wants to move quickly to remake Citigroup and her announcements at her first earnings call as CEO looked like she is moving fast. At the analysts meet, she mainly unveiled Citi’s decision to exit retail operations in 13 overseas markets, including China, India and Australia. She said the process of exiting this business has already started. The exits are in fact part of a plan to create 4 wealth hubs in the bank - in London, Singapore, Hong Kong and the United Arab Emirates - while divesting the retail businesses in the 13 countries. She clarified that Citi will keep serving customers in those countries who access Citi’s institutional clients group for private banking, cash management, investment banking and trading products.
SCALE ABSENT
Fraser was candid in saying: “While the 13 markets have excellent businesses, we don’t have the scale we need to compete. We believe our capital, investment dollars, and other resources are better deployed against higher returning opportunities in wealth management and our institutional businesses in Asia.”
Quite interestingly, the decision came on a day when Citigroup also announced that it has recorded the highest ever quarterly profits.
The decision will mean that in India, the iconic Citi card will disappear. The group has some 2.2 million credit card accounts with an average credit card spend that is 1.4 times the industry average. Citibank India is also the largest foreign bank in terms of assets under management under wealth management. It has currently 35 branches with 19,235 employees, 3 million customers and a business with a balance sheet of `2180 billion.
INDIA TALENT HUB
India is also a strategic talent hub for Citi and senior spokespersons for the bank has said the bank will continue to grow its 5 Citi Solutions Centers in the country which support its global footprint.
Citi lost its market share in card business to large competitors like HDFC Bank and SBI Card. However, the card portfolio has been growing steadily at 15 to 20% in spends per card.
Besides India, the bank will exit consumer operations in China, Australia, Malaysia, Bahrain, Korea, Indonesia, Russia, Vietnam, the Philippines, Thailand, Poland, and Taiwan.