For the first time in history, a woman is at the helm of a major Wall Street bank – the third-largest of its kind in the US, with a market capitalisation of no less than $164bn. But Jane Fraser, who stepped up to the role of Citigroup CEO in February, doesn’t just stand as a symbol of progress, or a token of diversity – she’s a strategising powerhouse, taken on to turn around a bank that’s long been overshadowed by its peers.

When the decision was announced last September, many praised the move, noting her ‘fix-it’ approach, demonstrated through more than 16 years spent climbing the ranks at Citi. During that time, she helped navigate the lender through the financial crisis, reshape its private bank, lead the mortgage division out of chaos and repair its Latin America business following a series of scandals in Mexico. As overarching president, she oversaw the global consumer banking division, gaining experience in an area that’s set to become a key focal point for Citigroup in the coming years.

But she has big challenges ahead; Citigroup’s shareholder returns have notoriously lagged behind those of its two biggest rivals. During the eight-year tenure under former CEO Michael Corbat, returns stagnated at 43 percent, compared to 137 percent for JP Morgan Chase and 169 percent at Bank of America over the same period, according to data firm Refinitiv.

Many have criticised Citigroup’s hodgepodge of different businesses, indicating a need to either consolidate or better unify them, and various mishaps haven’t helped the image. Turning that around is no small job at a lender still tarnished by its financial crisis struggles, when a $45bn bailout was needed to keep it afloat, and plagued by issues around technology, which many believe wasn’t a big enough focus under Corbat. Add in the blows of the pandemic – in the final quarter of 2020, revenues and net income fell 10 percent and seven percent respectively year-on-year – and it’s clear this is no easy feat.

Jane ‘change-agent’ Fraser
But many believe Fraser – twice named the ‘number one woman to watch’ by American Banker – is up to the task. Among them is Mike Mayo, securities analyst at Wells Fargo. “She is the right person, at the right time, to accelerate Citigroup’s strategic thinking,” he told World Finance.

“You can almost call her Jane change-agent Fraser. She’s had a decade at McKinsey and a long stint at Citigroup, so the opportunity is to McKinsey-ise the bank – to take a fresh and clinical look at all businesses, products, geographies, clients and distribution, and to reallocate resources. Because for the past decade, Citi has been too conservative in its strategy, with its balance sheet and loans and the type of customers the bank dealt with.” Dick Bove, Bank Analyst at Odeon Capital Group, agrees. “The job of this woman is to get new business and to solve the problem with the government on technology,” he told Reuters. “That’s her job, and I think if anybody can do it, she can.”

And Fraser hasn’t disappointed so far; she’s already announced plans to close Citigroup’s consumer banking divisions in 13 markets across Asia, Europe and the Middle East, and is ‘doubling down’ in areas including wealth management in Asia and the US. She’s also set about addressing work-life balance issues – scrapping Friday video calls and implementing a company-wide ‘Citi reset day’ – and has spoken openly about the need to diversify the organisation at a time when issues around inclusivity have shot into the limelight. These efforts seem to be paying off; Citigroup beat analysts’ predictions in the first quarter of 2021, reporting net income of $7.8bn – up from $2.5bn in the same period in 2020, with earnings per share up $3.62 from $1.06.

Bold beginnings
That success likely comes as little surprise to anyone acquainted with Fraser’s past. Born in St Andrews in Scotland, she studied economics at the University of Cambridge and began her career as an M&A analyst at Goldman Sachs in London in 1988. Shortly after, Fraser moved to Madrid to take a brokerage job, later explaining in a speech how she’d found herself “the boring British girl” and wanted something “more exciting,” according to The Financial Brand. “That was literally the driver of my decision,” she said.

Two years later, she moved to the US to study for an MBA at the Harvard Business School, then joined McKinsey in New York as a consultant in 1994. She reportedly said she would only join if she could work directly under the head of banking, Lowell Bryan. “She’s the only person who’s ever done that,” he told the Financial Times, who was so dazzled by her gutsiness he took her on. A few years later, Fraser had her first son and shortly after became a partner, opting to work part-time to balance work and family.

She spent the first six years of her McKinsey stint in New York and the final four in London, during which time she co-authored the book Race for the World: Strategies to Build a Great Global Firm in 1999. This involved travelling across Asia for research and interviewing clients about the challenges they faced globally. Citigroup executive Michael Klein was reportedly so impressed with her research that he spent several years trying to get her to join the bank. In 2004 she relented, beginning as head of client strategy in the investment and global banking division.

Climbing the ranks
At Citigroup, Fraser quickly climbed the ranks, becoming global head of strategy of mergers and acquisitions in 2007 and leading a restructuring process during the heart of the financial crisis. Two years later she was named chief executive of Citi Private Bank in London. During her four-year tenure she turned the ailing bank around, returning it to the black and increasing revenue by more than a fifth from the first half of 2010 to the first half of 2013.

Her strategy included overhauling the division’s leadership, and implementing a fee schedule that remained the same regardless of whether clients used Citi’s fund managers or those of an external firm.

But it was as chief executive of CitiMortgage that Fraser really earnt her stripes, moving to St Louis in Missouri in 2013 to work her magic on the struggling division. Demand for mortgage refinancing had dropped significantly; under Fraser’s leadership, Citigroup closed several mortgage offices across the country and switched the focus to selling residential mortgages to home buyers.

She also worked on developing better relationships with regulators. That included paying out $7bn in 2014 to settle charges made against the bank by the Department of Justice for allegedly packaging up bad mortgages in the run-up to the financial crisis. Many praised her strategy during the role; a fellow CitiMortgage employee told the Financial Times how she had brought “a focus and an energy” to an ailing area, noting how “she was able to have people excited about thinking about tomorrow instead of just how we cleaned up yesterday.” That strategy clearly paid off, and within a year, Fraser was promoted to run the US consumer and commercial banking businesses.

A handle on scandals
But Jane ‘change-agent’ Fraser wasn’t done there. In 2015, she was named head of Citigroup Latin America, moving to Miami to become both the first female and the first foreigner to lead the lender’s Latin America division, taking responsibility for 24 markets. During her time there, Citigroup closed its retail banking and credit card businesses in Brazil, Argentina and Colombia, and pumped significant sums into Mexican subsidiary Banamex (or Banco Nacional de Mexico), which the company had bought in 2001.

Heading up Banamex meant overseeing more than 1,400 retail branches across Mexico – at a time when the subsidiary was embroiled in a scandal related to fraud and money-laundering. In 2014, it had been fined $2.2m in fraud charges, and regulators were investigating control failures that would later lead to nearly $100m in fines.

That wasn’t the only challenge Fraser faced. “When I was first put in charge of Latin America, there were some pretty negative headlines in the press of Mexico about having a female foreigner with responsibility,” she told CNN in 2018. She said that instead of attempting to “out-machismo” the men, however, she embraced her femininity and was encouraged by her husband to buy “an elegant red dress, slightly higher heels than she was used to, and a new haircut.

He knew that if I could stride out there and be quite comfortable in who I am that would be a benefit.” Whatever she did, it clearly worked; under her four-year stint, like-for-like revenues at the Latin America division grew by nearly a third, while profits grew two-thirds. According to Michael Helfer, a board member of Banamex, Fraser “captured everybody, partly because she spoke Spanish” and partly because she “immediately began to exercise control in an appropriate way,” he told the FT.

It was likely that ability to ‘capture everybody’ that saw Fraser named president of Citigroup and head of global consumer banking in 2019. Some saw this role as a trial for the top-dog position. “It’s a training ground to see if she’s potentially the right person,” Jeff Harte, an analyst at Sandler O’Neill, told Bloomberg Quint at the time. “To name her president, both Corbat and the board must see her as the right person to be CEO.” Fraser clearly passed the test – less than a year into her role, it was announced she would be stepping up to the CEO throne.

Action stations
And she wasted no time in bringing about change. In the first quarterly earnings call since that announcement, Fraser hinted at realigning or selling off certain business lines to simplify the $2.3trn-asset company. She told CNBC, “as we look at the businesses over a decade ahead, we want to be a winner. We want to close the return gap with our peers. To do that you take a candid assessment of which of the businesses that you’re going to be in a position to succeed in winning, and which ones are perhaps in better hands with another bank.”

Closing 13 markets was one way of scaling back; under the plan, consumer banking operations in Australia, Bahrain, China, India, Indonesia, South Korea, Malaysia, the Philippines, Poland, Russia, Taiwan, Thailand and Vietnam are all set to be shut down, and instead operated from four main hubs in Singapore, Hong Kong, the United Arab Emirates and London. That announcement was made less than two months into the role, surprising many, according to Wells Fargo’s Mike Mayo. “I think investors were collectively surprised at how soon she came out with the decision,” he told World Finance. “But I think what’s interesting is that what might be perceived as a tough decision is probably not so tough for somebody with such a strategic background as Jane Fraser.”

That strategic approach is coming through in other ways, too; in January, it was announced in a memo that the group would be overhauling its wealth management division, creating a new global wealth unit that would bring together its consumer wealth organisation together with its private bank (formerly part of the group’s institutional clients group). She’s also addressing regulatory issues; in October, the bank was fined $400m by regulators after an employee accidentally wired $900m to creditors at cosmetics firm Revlon, calling into question its loan operation software. The mishap saw the company revise its fourth-quarter profits by $323m, and a source told Bloomberg that plans are now in the pipeline to recruit a horde of new coders and compliance officers to update the system.

Social change
But it’s not just in these areas that Fraser is making her mark. On day one of her tenure, she announced an ambitious plan for Citi to reach net-zero greenhouse gas emissions in its financing activities by 2050 – building on a $250bn pledge made under Corbat last year to finance low-carbon solutions in renewable energy and other areas. She said the group would be transparent in its progress, reflecting a wider move towards transparency in other areas too.

“Our environmental, social and governance agenda can’t just be a separate layer that sits above what we do day-to-day,” she wrote in a Citi blog post. “Our commitments to closing the gender pay gap, to advancing racial equity, and to pioneering the green agenda have demonstrated that this is good for business and not at odds with it.”

It was as chief executive of CitiMortgage that Fraser really earnt her stripes, moving to St Louis in Missouri in 2013 to work her magic on the struggling division

She’s also putting a renewed focus on diversity. “What we’ve really tried to do at Citi is to make sure diverse candidates see us as a place where they can thrive and advance their careers,” she told TIME magazine. “Things like strong parental-leave policies and maintaining an inclusive culture can make a huge difference.”

As the first female chief executive of a top-tier Wall Street bank, she’s clearly well placed to fight that battle – and she’s spoken openly about the obstacles that faced her, as a mother of two, in rising to the top. In 2008, her Cuban husband Alberto Piedra left his role as head of global banking at Dresdner Kleinwort to be a full-time father and support her career.

“Being a mother of young children and having a career is the toughest thing I have ever had to do,” she said after leaving McKinsey, according to an Axios report. “You are exhausted, guilty, and you must learn how to do things differently. It was the making of me because I became much more 80:20, focusing on what was really important. I got good at saying no, and also became more human to the clients who also face many of these issues too.”

That element of being ‘human’ is a trait that seems to run through much of Fraser’s approach to leadership. Former colleagues have noted her love of pranks, as well as her ability to boost morale. And despite the challenges that Fraser has faced as a female leader, she has also said how “being a woman has been helpful. You are a bit different from other leaders,” she said in an interview with the FT. “I’ve always enjoyed the fact that you can therefore play the game differently, you’ve almost got licence to have more degrees of freedom, and that’s fun.”

A new world
Those differences are already starting to shine through; in March, Fraser signed off plans for ‘Zoom-free Fridays,’ while encouraging employees to take more annual leave. “We are a global company that operates across different time zones, but when our work regularly spills over into nights, very early mornings and weekends, it can prevent us from recharging fully, and that isn’t good for you nor, ultimately, for Citi,” she wrote in a memo, reported by Financial News.

Whether that attitude spreads beyond Citi and into the wider realms of the banking sector remains to be seen, but Corbat, for one, holds faith in her ability to conjure up a new dawn, and to bring about the change Citi has long been waiting for. “As I pass the reins to Jane, I can confidently say that this 208-year-old institution has its best days ahead,” he wrote in a parting memo to staff, reported by Bloomberg. “I cannot wait to see how Citi helps shape this new world.”

And it seems only right that it’s Fraser – a woman at the top of her game, a change agent unafraid to throw out the old rules, a mother of two who’s managed to balance work and family – is shaping that ‘new world.’

And if her past performance is anything to go by, she won’t disappoint.