Remarks by CEO Jane Fraser at Citi’s 2023 Annual Stockholders’ Meeting

As prepared for delivery

Thank you, John, and a very warm welcome to our shareholders. The tremendous benefit of holding this meeting virtually is that we are welcoming many more fellow shareholders from all over the U.S. and the world. I’m looking forward to updating you on how we’re transforming Citi and the progress we’ve been making.

Before we dive in, I’d like to address the events that unfolded in March. As I said during our most recent earnings call, the U.S. banking system is strong, and remains the envy of the world. And, as we saw when the financial system came under stress, the very robust position of the large U.S. banks enabled 11 of us to come together quickly to help stabilize the situation.

I am proud that Citi served as a source of stability for the system and support for our clients during these times of volatility. We’re in a position to do this because of our efforts to deliver a simpler, more focused Citi. We benefit from a diversified earnings mix and a resilient business model. We're disciplined in how we run the firm, from client selection to capital planning. And this has all been reinforced by our robust balance sheet management, liquidity position, and strong risk management frameworks.

We are well-positioned to navigate whatever environment we may face. The turmoil in the banking sector is the latest challenge on a rather long list. Whether it’s inflationary pressures and other long-tail impacts of Covid, or rapid digitization impacting all aspects of doing business, or geopolitical challenges, not the least of which is the war in Ukraine, Citi continues to be there for our clients, our colleagues and our communities through thick and thin.

Indeed, we intentionally constructed our strategy and business mix to withstand different macroeconomic conditions. As the most global of banks, we have distinct capabilities that can only come from being on the ground in 95 different markets. These capabilities proved invaluable to our clients, enabling them to manage through so much volatility and transformative change over the last two years. 

We are driven by absolute clarity in our vision for the firm. That vision is to be the preeminent banking partner for institutions with cross-border needs, a global leader in wealth management and a valued personal bank in our home market of the U.S. To that end, we have centered the firm around five core, interconnected businesses: Services, Markets, Banking, Wealth and U.S. Personal Banking. And with execution well underway, we are focused on accelerating our growth, gaining share and increasing returns for our shareholders over time.

Last year we also showed you that, despite everything going on in the world, we have the discipline to deliver what we said we would deliver. We met our financial guidance for 2022, set a year ago at our Investor Day, earning nearly $15 billion in net income on revenues of over $75 billion. At year-end, our Return on Tangible Common Equity was nearly 9%, keeping us on track to achieve an RoTCE of 11 to 12% in the medium term. We returned over $7 billion to our shareholders through common dividends and share repurchases. And we continued to deliver against our commitments, as you saw, in a good first quarter for this year.

Let me take a few minutes to dig more deeply into our five core businesses and the progress we are achieving in each, as demonstrated by the KPIs we laid out at Investor Day.

I’ll start with our crown jewel, our two Services businesses. Treasury and Trade Solutions met its market share growth goal two years early. We’re the undisputed industry leader here, but we’re not resting on our laurels: we are investing heavily to continue delivering industry-leading capabilities to our clients, such as our 24/7 clearing product—a first in the industry. Securities Services also delivered outstanding revenue growth, having onboarded $1.2 trillion of new assets last year.

Markets has long been one of our core profit engines, driven by our leading position in Fixed Income. Our franchise is client-driven, with a particular strength in corporates for whom we are the go-to bank for foreign exchange, rates and commodity hedging. This client segment comprises more than a third of our footprint and makes our risk flows more diversified than our competitors in volatile markets.

Corporate banking is another traditional area of strength, given our global network. We’ve also put an emphasis on growing our Commercial Bank, which is uniquely placed to serve mid-market companies around the world aspiring to grow internationally. Indeed, this is a key growth engine for us, both as a feeder of new clients into our corporate bank and because of its natural synergies with each of our core businesses. While investment banking has suffered recently from very challenging conditions, we’re playing the longer game here. The investments we’ve made in talent will pay off in client relationships and share gains once the cycle turns, particularly in the health and technology sectors.

Although Wealth has also faced headwinds from the macro environment, I’m a strong believer in our potential here and in our differentiated value proposition. This has been reinforced by Andy Sieg’s decision to join us later in the year to head Wealth Management. Andy comes to us after running an $18 billion wealth business with $2.8 trillion in client balances. He’s the latest and most visible example of the incredible talent we’ve attracted to Citi over the past two years.

Finally, U.S. Personal Banking, which is home to our high-returning Cards franchises. Following a couple of tough years during Covid, this business is now firing on all cylinders as the underlying drivers have returned to—and in many cases are now better than—where they were pre-Covid. We’re also pushing ahead with new products and innovations such as our new travel booking site. And finally, our Retail Bank serves a valuable consumer customer base and plays an important role in our growth strategy through its connections to our Wealth business.

Over time, the plans we have for each of these five businesses will change our business mix and drive revenue growth and returns. Our success is also predicated on realizing the strong synergies between our businesses. We shared with you the KPIs we laid out at Investor Day to demonstrate our progress in doing so.

At the same time, we’ve made rapid progress simplifying our business model through the exit of our international consumer franchises. We’ve closed the sale of seven consumer businesses, with the final two Asian sales closing later this year. We are also progressing rapidly with the wind-down of our consumer banking operations in Korea and China. Whilst in Russia, we’re actively ending nearly all of our banking services so our only operations there are those necessary to fulfill any remaining legal and regulatory obligations. And in terms of Mexico, we remain committed to a dual-track approach of exiting the consumer franchise, either through a direct sale or through a public market transaction.

Our swift and disciplined execution simplifying the firm means we are able to put all our focus on our five core interconnected businesses and meeting our medium-term financial targets, along with our Transformation.

Our number one priority remains our enterprise-wide Transformation program. It’s a multi-year effort that’s tackling the regulatory and other issues that have held us back and will ensure we are a more modern, well-controlled and efficient bank. We recently named Anand Selva our Chief Operating Officer. Anand has a long track record of delivering results, and he will lead our Transformation, in addition to his current responsibilities.

We are 100% focused on executing our plans. So, let me make this more real: As part of efforts to improve our risk and controls, we launched a new model for managing and delivering wholesale credit—everything from underwriting a loan to managing its collateral. This means all wholesale credit activity across the entire firm is now run in a standardized and consistent way, eliminating errors and enabling us to more quickly identify risks in our portfolio and act upon them.

We’re simplifying processes and rationalizing systems. For example, we consolidated 20 cash equities trading platforms into a single modern platform, allowing us to trade at significantly higher scale. We’re improving how we manage our data, which will give us better insights to serve clients and more accurate, timely information to run the bank.

Ensuring we have a culture characterized by excellence underpins the success of our Transformation. We have hardwired accountability into our firm by strengthening our performance management processes. And we have increased alignment between shareholder interests and senior pay, so our senior leaders are always prioritizing long-term shareholder value.

Collectively, our Transformation will not only modernize the firm, but will address regulatory concerns, enhance our client experience and drive efficiency.

As a global bank, we continue to help our clients and communities solve the big challenges they wrestle with every day—in energy, sustainable finance, infrastructure and supply chain resiliency, amongst many other areas. This work is central to how we support our clients and help them compete in the future. And it is critical to our own business as well.

For instance, we finance our clients’ transitions to low-carbon business models whilst also supporting clients who ensure there’s an ample and affordable energy supply to meet the world’s current and future energy needs. And we push all our clients to have credible plans to transition to cleaner business models, from the easy- to the hard-to-abate sectors.

Through our $1 trillion sustainable finance goal, we’re investing in the health of the communities where we operate. This financing has been directed toward myriad opportunities, including supporting microfinance in Peru, expanding access to healthcare in India and increasing food security in Nigeria.

Here in the U.S., we are putting our balance sheet to work to benefit local communities. Last year, we partnered with state and local governments to catalyze nearly $20 billion in infrastructure investment, such as schools, hospitals and roads. We also financed $6.3 billion in affordable housing, making us the number one affordable housing lender in the U.S. for the 13th year in a row.

Through our Action for Racial Equity initiative, we’ve stepped up our partnerships with minority-owned depository institutions. Our commitment to tackling the racial wealth gap is as strong as ever and will not only drive growth in the U.S. economy but will also open up new business opportunities for our own firm. Breaking down barriers to banking is another a top priority. And last year, we became the first of the largest U.S. banks to eliminate overdraft fees and returned-item fees for all our customers nationwide.

I am also proud of our efforts to attract, develop and retain a diverse workforce—knowing that this is both a competitive advantage for us in the talent market and delivers benefits to our clients by bringing new perspectives and solutions to bear.

All these efforts are not only connected to our mission of enabling growth and economic progress, but they also will drive returns for our shareholders and create value for all our stakeholders.

Everywhere you look around the firm, there is an undeniable sense of momentum. A laser-focus on action and results. We’ve never been clearer about the bank we want to be, and we’ve made significant progress over the past year making it happen. Through our relentless commitment to excellence, we are changing the trajectory of Citi to hit our medium-term targets and deliver a new era of success for all our shareholders.

Thank you for your time, and I look forward to answering your questions later on in the meeting.