Remarks by CEO Jane Fraser at Citi's 2022 Annual Meeting

April 26, 2022
Jane Fraser, Chief Executive Officer, Citi

Thank you, John and Brent, and welcome to all our fellow shareholders who’ve joined us today.

I’m looking forward to sharing my thoughts about Citi’s recent progress and where we’re headed.

But let me first say a few words about the developments we’re seeing on the global stage.

With many parts of the world moving beyond the darkest days of the pandemic, we now face a new test of our solidarity and resolve – and that’s the horrific war in Ukraine.

As a linchpin of the financial system, Citi has a critical role to play here.

We’re implementing the sanctions aimed at Russia and helping our multinational clients who have decided to unwind their business in Russia.

We’re also reducing our own operations in Russia beyond our plans to exit our consumer franchise and we’re actively reducing our own financial exposure.

But it is the humanitarian crisis that we prioritize.

I was in Poland just last week meeting some of our colleagues who have heroically risen to the occasion, assisting with the relief efforts and, in many cases, opening their homes to refugees.

I also met with colleagues from Ukraine who were able to leave the country and whom we’ve helped relocate in Poland.

We could not be more proud, nor more grateful, to our people in Ukraine.

Despite everything they face, they have kept our bank operating so we can help the humanitarian organizations on the ground deliver aid as well as support our clients and their critical supply chains.

The consequences of this war will be with us for a very long time because the course of history has changed – and along with that will be material ramifications for the old global financial order.

It’s a sign of Citi’s resilience that our bank continues to serve as a source of strength to our clients and customers during this unprecedented period of change and challenge.

In 2021, we continued to help them navigate the economic impacts of the pandemic.

Our institutional franchise led the way, helping clients grow, reconfigure supply chains and access capital markets.

For the year, we generated net income of $22 billion on revenues of $71.9 billion, with a Return on Tangible Common Equity of 13.4%.

Included in those numbers is the release of loan-loss reserves that we had set aside during the pandemic.

Excluding those reserve releases, our net income was $14.9 billion, and we earned 8.9% on tangible equity.

And during the year, we were able to return nearly $12 billion of capital to common shareholders.

In the first quarter of 2022, we reported earnings of $2.02 per share on $4.3 billion in net income.

With all that is going on in the world, I think the firm performed reasonably well this quarter and we remain focused on helping our clients navigate a macro environment that will continue to be both complex and uncertain.

As a global bank, we feel a special responsibility to confront many of society’s toughest challenges.

These efforts are embedded in our day-to-day business and are central to our mission of enabling growth and driving economic progress.

On my first day as CEO, we committed Citi to achieving net zero greenhouse gas emissions by 2050.

Over the past year, we’ve been mapping out how we’re going to get there, rolling up our sleeves to partner with our clients and guide the industry forward.

Earlier this year, we released our initial plan, setting 2030 targets for our energy and power loan portfolios.

We’re helping to set the bar for our industry through our commitment to decarbonize our portfolio, as well as our commitments to work with our clients to help drive the clean energy transition.

Our commitment to societal progress has also led us to take on the challenge of economic inclusion.

Since launching our Action for Racial Equity initiative in 2020, Citi and the Citi Foundation have invested more than $1 billion to help close the racial wealth gap in the U.S., and we’ve commissioned an audit to measure the impact of these efforts.

And across the globe, we’ve continued maximizing the impact we can make, particularly in our most underserved communities.

Since 2007, we’ve helped 3.7 million women around the world launch or grow their businesses.

In 2021, we issued a first-of-its-kind $1 billion social finance bond to increase access to essential services in emerging markets.

This is part of a goal we set last year to expand access to housing, education and healthcare for 15 million low-income households, including 10 million women.

Our recently announced plan to eliminate overdraft fee charges in the U.S. will also increase financial inclusion.

All told, we’ve committed $1 trillion to sustainable financing by 2030, which comprises $500 billion toward environmental activities and $500 billion toward social activities.

Every day, we are seeing how our ESG agenda is such a strong selling point for Citi in the battle for talent.

Over the past year, we’ve attracted some tremendous new leaders to Citi and promoted our highest-performing leaders within the firm to new roles.

I’m also proud that we recently met and exceeded goals to increase the representation of women and Black colleagues in our senior ranks.

Globally, we increased representation in the Assistant Vice President to Managing Director levels for women to 40.6%... and in the U.S., we increased Black representation within those same levels to 8.1%.

And we did it by embedding these goals in our business strategy, strengthening our talent pipelines, evolving our recruitment and hiring, promoting internally and making Citi a more attractive place for everyone to work.

I’m proud of what Citi has achieved over the past year. We’ve done a lot to put us on the right path to compete and win in the decade ahead. But of course, there is much more to do.

Our vision for Citi is to be the pre-eminent banking partner for institutions with cross-border needs, a global leader in wealth management and a valued personal bank in our home market.

Last month, we held our first Investor Day since 2017.

It was an opportunity to update our investors after a year of refreshing our strategy to focus our resources and energies on a compelling mix of businesses that can drive growth and higher returns.

Going forward, we will be a firm focused on five core units with strong connectivity amongst them.

Those five businesses are Services, Markets, Banking, U.S. Personal Banking and Global Wealth Management.

A key part of our strategy is investing in the Services businesses that really are at the heart of our global network and generate strong, fee-based returns.

Through our Commercial Bank, we’ll expand our work with an important client segment – mid-sized companies who have aspirations to go global.

Another priority is our ambition in wealth management. By combining our Private Bank and consumer wealth businesses, we’ve created a single, integrated platform to serve clients across the entire wealth continuum.

As we focus our resources in a more targeted way, we’ve also made some hard decisions about which businesses no longer fit into our vision for Citi.

We’ve announced our intention to exit our consumer and small- and middle-market business in Mexico and 13 other consumer businesses in Asia and Europe where there was simply not clear connectivity to the rest of our firm.

We’ve so far reached agreements to sell nine of those businesses and we’ve decided on a path for Korea.

Notwithstanding these decisions, Citi will continue to serve our clients and invest in these markets through our institutional franchise and our wealth business.

For our strategy to unlock the greatest possible value, we know we need an infrastructure that’s scaled and agile and delivers a great user experience.

The Consent Orders issued in 2020 by the Federal Reserve Board and Office of the Comptroller of the Currency underscored how we underinvested not only in parts of our infrastructure but also in our risk and control environment.

In 2021, we launched an effort to begin to address those deficiencies and simplify and modernize our operating model for the digital age.

This work is so consequential in nature that we’re calling it our “Transformation.”

As part of our Transformation, we’re enhancing our risk and controls environment to be more intuitive and automated.

We’re also improving how we organize and leverage the incredible amount of data we have as a global bank.

Ensuring we have a culture characterized by excellence and accountability underpins the success of our Transformation.

We’ve updated our Leadership Principles and adjusted our performance rating system – all part of an effort to increase accountability for how our people should approach their work.

And by breaking down silos and deepening the sense of ownership our people feel for the firm, we’re building a culture that’s focused on delivering the best outcomes for all our stakeholders and creates collective accountability.

Taking into account our growth plan, the investments we’re making in our businesses and the resulting efficiencies… we believe we can increase shareholder value and achieve an RoTCE of 11%-to-12% in the next three to five years.

Over the longer term, I believe that our strategy will lead to a higher-quality earnings mix, and we’ll further increase our returns as a result.

As we look to the horizon, the stakes could not be higher – the world is only becoming more complex and more competitive.

But at Citi, we are determined to seize this moment.

We’re excited about the work we have done over the past year to focus our strategy on where we can win.

And we’re confident we have put Citi on the right path to improve returns over the long term.

Thank you for this opportunity to share these thoughts with you. And John and I very much look forward to answering your questions later on in the meeting.

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