What Happened to Citigroup (Citi)?

Citigroup, a global financial services giant, has been in the midst of a profound multi-year transformation since CEO Jane Fraser took the helm in 2021. This strategic pivot, often referred to as the 'Transformation,' aims to simplify the bank's complex structure, improve its risk management and internal controls, and focus on its most profitable core businesses. The impetus for this overhaul stemmed from years of underperformance relative to peers and significant regulatory scrutiny, including consent orders issued in 2020 by the Federal Reserve and the Office of the Comptroller of the Currency (OCC) over deficiencies in risk management and data governance.

A key pillar of Fraser's strategy has been the aggressive divestiture of non-core consumer banking operations across 14 markets in Asia, EMEA, and Mexico. By September 2025, Citi had successfully exited nine of these countries and was preparing for an initial public offering (IPO) of its consumer banking and small business operations in Mexico. This streamlining is intended to free up capital and allow for greater investment in high-growth areas such as Services (treasury and trade solutions, securities services), Wealth Management, and Investment Banking. The bank also announced plans in early 2024 to reduce its global workforce by approximately 20,000 employees by the end of 2026, a move expected to generate $2.5 billion in annualized run-rate cost savings.

Regulatory compliance remains a top priority. Following a $400 million fine in 2020 and an additional $136 million penalty in 2024 for delays in addressing data management issues, Citi has invested heavily in its 'Transformation' work. As of February 2026, executives expressed optimism about completing the compliance work on the major consent orders later this year, with CEO Jane Fraser stating in January 2026 that over 80% of the Transformation effort was complete. The OCC even removed a 2024 data amendment to a 2020 order in December 2025, signaling progress.

Financially, Citi has shown encouraging signs of momentum. In Q1 2026, the bank reported net income of $5.8 billion, up 42% year-over-year, on revenues of $24.6 billion, a 14% increase. This strong performance was broad-based, with Markets revenue up 19% and Services growing 17%. Q2 2026 continued this trend, with revenue reaching $24.8 billion, the highest quarterly total in a decade, and net income rising 45% to $5.8 billion. The Services business, in particular, delivered robust growth, with revenue up 18% and average deposits increasing 19% to approximately $1 trillion. At its Investor Day in May 2026, Citi set stronger profitability targets, aiming for an adjusted return on tangible common equity (ROTCE) of 11% to 13% for 2027 and 2028, and announced a new multi-year $30 billion share repurchase program.

As of August 2026, Citi continues to execute its workforce reduction plan, with recent layoffs in New York and New Jersey, part of the broader goal to cut 20,000 jobs by year-end. The bank is also actively investing in technology, including AI and digital asset capabilities, to enhance client offerings and improve productivity. While analysts acknowledge the significant progress, some remain cautious about execution risks in a competitive market. However, the overall sentiment is that Citi is moving towards a more focused, efficient, and profitable institution, with its stock showing positive returns in 2024 and 2025.