Jane Fraser is nearly 4 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. 

When Jane Fraser took over Citi in March 2021, she inherited a bank saddled with regulatory problems and outdated technology that lagged behind its other household-name peers.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 by 33% in the year to date, but Fraser’s overhaul has a long way to go. The banker R. Christopher Whalen wrote of the numerous drags on Citi’s performance, including high-interest expenses, large funding costs, and undersized noninterest income.

“It is a big positive that the market following for Citi has improved, yet the financial performance remains a struggle,” Whalen wrote. “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 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. But 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’s greater stress about 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 a Citi consumer-bank veteran, Anand Selva, naming him chief operating officer in March 2023. Eight current and former employees told B-17 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 about the Transformation’s progress or lack thereof.

That said, Citi might get some breathing room during Donald Trump’s second term. Trump has signaled that he’d cut down on oversight. In a speech at the Economic Club of New York in September, he pledged that if reelected, he’d 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 B-17 that Citi was still in “regulatory purgatory” but that the bank would likely face less scrutiny of its data-quality issues.

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