Jane Fraser is trying to make history. Citigroup’s (C.N) boss said the shake-up she unveiled on Wednesday is the most “consequential changes” to the organization in 20 years. Her predecessor Michael Corbat might beg to differ, as could former CEO Vikram Pandit.
Citi, in fact, has been jackhammering away for even longer than two decades. The response to Fraser’s ballyhooed handiwork, which includes slashing jobs and streamlining into five divisions, reflects the numbness to such grandiose claims. Citi shares gained less than 2% in a flat market following her presentation at the Barclays Global Financial Services conference.
There’s little doubt the $80 billion bank could do with less bureaucracy, especially if more dramatic decisions are in the works. If this is all there is, however, Fraser has oversold the achievement. After all, Pandit in 2008 touted a new organizational structure to forge a “simpler, leaner” Citi. Corbat kept reorganizing through 2019.
The bottom line is that an investor who put $10 into Citi 20 years ago would have just $1 today. The same $10 invested in JPMorgan (JPM.N) turned into $75 while an S&P 500 Index (.SPX) fund generated $65. Absent genuinely historic changes, there’s little reason to think this time would be much different.
(The author is a Reuters Breakingviews columnist. The opinions expressed are their own. Refiles to add link.)
Follow @Breakingviews on X
Capital Calls – More concise insights on global finance:
Unity discovers how real the revenue struggle is read more
Rising US gas prices are both good news and bad read more
Inditex can afford to start sharing its cash pile read more
Higher pay makes life harder for Treasury and BoE read more
UBS job cuts are tiny strike at Asia wealth fears read more
