Citigroup Projects less Profitability Due to Increased Expense for Strategy Shift
In an investor presentation on Wednesday, Citigroup Inc. said the profitability will be affected as the bank pursues a shift in business strategy that will entail raised expenses in the short term. The ROTCE or Return on Tangible Common Shareholders Equity over the next 3-5 years will be 11% to 12%, and last year it was 13.4% compared to 23% posted by JPMorgan Chase.
Focus on high-yielding businesses Jane Fraser, who has been the CEO for just about a year, has started overhauling many of the bank’s businesses for which Citibank was known for centuries. She announced Citibank’s plan of exiting retail banking operations in around 14 countries globally. This also includes the Citi franchisee in Mexico, which is home to the largest branch network of the bank. The bank would now focus its investment on high-yielding businesses.