Citigroup expects CEO Fraser’s overhaul to drive 11% to 13% profitability

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.

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.

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.

The bank unveiled a multi-year $30 billion share buyback plan, expected to begin in the second quarter of this year.

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.

Shares of the bank were down 2.5% in premarket trading.

FOCUS ON FRASER’S TURNAROUND PLAN

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.

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.

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.

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)