By Tatiana Bautzer, Utkarsh Shetti and Saeed Azhar
NEW YORK, May 7 (Reuters) – Citigroup is expecting a key profit metric to range between 11% and 13% for 2027 and 2028, the bank said on Thursday, as CEO Jane Fraser spearheads a company-wide overhaul to drive growth.
The new targets compare with Citi’s goal of achieving an adjusted return on tangible common equity of between 10% and 11% for the year and its 2025 return of 8.8%. The metric is an important industry figure that measures profitability on tangible assets.
“This is a bank built both to grow and perform consistently, and that’s what underpins the path to our target returns,” Fraser said at the bank’s investor day, where it is set to lay out medium-term goals for its businesses.
The bank also unveiled a multi-year $30 billion share buyback plan, expected to begin in the second quarter of this year.
For 2029 and 2031, Citi said it was expecting a return in the range of 14% to 15%.
“The key target, ROTCE, was underwhelming in the near term but the $30 billion repurchase authorization was a clear positive,” RBC analysts said in a note.
Shares of the bank were down 1.3% in premarket trading.
FOCUS ON FRASER’S TURNAROUND PLAN
Six years into her tenure, Fraser is heading her second investor day to present the results of a massive reorganization that shrank Citi by selling retail businesses worldwide, eliminating management layers and increasing risk and controls.
Since she took over in March 2021, Citi shares have risen more than 80%. They are up more than 9% so far this year, compared with a 7.5% rise in the S&P 500 index.
The bank beat Wall Street expectations for first-quarter profit last month, raking in strong revenue from its trading business and also benefiting from robust dealmaking that lifted investment banking fees.
It posted an ROTCE of 13.1% in the quarter and reported its highest quarterly revenue in a decade at $24.6 billion.
(Reporting by Tatiana Bautzer in New York and Utkarsh Shetti in Bengaluru; Editing by Arun Koyyur and Anil D’Silva)
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