Jane Fraser

Spear’s Review

When Jane Fraser took on the top role at Citi almost four years ago, Wall Street observers weren’t shy in describing the mammoth task in front of her. At the time the US banking mainstay was widely regarded as a laggard, with its share price well below its bulge bracket peers. Even worse, it had been lumbered with one of the biggest regulatory actions in US financial history, with federal regulators issuing a $400 million fine, on top of a major probe into its risk-management systems.

Scottish-born Fraser, a McKinsey veteran and former head of Citi Private Bank, insisted she was unfazed by it all, even describing the regulatory clampdown as a chance to ‘galvanise’ change. True to her word, Fraser would shortly pledge an overhaul of the banking behemoth, promising to eliminate bureaucracy and speed up decision-making.

At the time of writing, the Fraser revolution looks set to eliminate 20,000 positions – equivalent to 8 per cent of Citigroup’s entire workforce. Fraser’s former parish has not escaped the axe, with 7,000 private banking jobs reportedly set to go.

The new boss has also shown similar ruthlessness when it comes to the big governance questions. This autumn it was reported that she had stripped the group’s long-standing chief operating officer of sole responsibility for the compliance issues of interest to federal regulators. Insiders say Fraser wanted the task completed more quickly – even if it meant bruising egos.

Citi’s board appears convinced by her tactics. Last year it voted to boost her salary by 6 per cent, granting an annual compensation package worth $26 million. The board says the decision was taken in respect of her overseeing the bank’s biggest organisational change since the great financial crash.

Whether it will succeed or not is less clear. In the event that Fraser triumphs, she may well secure her place in Wall Street history.