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Citi CEO Jane Fraser On Exposure To Russia And Humanitarian Side

By Jacob Wolinsky. Originally published at ValueWalk.


Following are excerpts from the unofficial transcript of a CNBC exclusive interview with Citigroup Inc (NYSE:C) CEO Jane Fraser on CNBC’s “Squawk on the Street” (M-F, 9AM-11AM ET) today, Thursday, March 3rd.

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Jane Fraser On Investors And Citi Strategy

DAVID FABER: Well, yesterday as well you had an important day, which was your investor day. You’ve been in the job for one year. Somewhat muted response from at least the analyst’s community to what you presented yesterday. A long road for improved returns, patience required. Are you happy with sort of the response that you’ve gotten? Is that the message you wanted to send that this is going to take time?

JANE FRASER: Yes, I’m very positive about the response we got. What we wanted to do yesterday was provide clarity to our investors, to the street, about the vision we have for Citi, the strategy and our plan, our execution plan, and I think yesterday was successful in achieving that. We’ve been hard at work for a year. So, it’s a culmination of the work of the year and be able to provide that simply, straightforwardly and we will now focus on executing.

FABER: Well executing is obviously going to be the key but you know, there are those who say a three to five years to get to an 11% to 12% ROTCEs is longer than we might have thought. What do you say to those who question whether the timeline perhaps is going to be a bit too long and try the patience of some of your investors.

FRASER: Yeah, I have certainly had big ears listening to our investors and so we we’ve taken a big step back when we set the vision, we set the strategy for the firm to be a longer-term vision and strategy and plan. We’ve taken a number of bold moves already in terms of the divestitures of a number of our historically iconic franchises to really focus Citi around our core strengths. We’ve taken strategic bets in businesses that we’ve got high confidence and excitement about around growth, but this is an organic growth strategy. It will take time and I want to be completely transparent and realistic around what it’s going to take and it is going to take a few years for us to achieve the medium term targets. I absolutely aspire for higher returns. And I’m confident we’ll get that in the longer run. But right now, I’m focused on the job in hand.

Fraser On Citi’s Plan

FABER: And I want to talk a bit more about that but to that idea of at least meeting those targets and I’m reading a note here from Goldman Sachs, one of the key questions you got this yesterday as well during the presentation’s Q&A, you know, the execution of the plan, will it be different than four years ago when or five years ago when Citi largely missed most of the original targets set out at its 2017 investor day. You know, again, this idea of why should we believe Citi now when the company did not deliver on its previous targets.

FRASER: We have a very, very credible plan. It’s one that’s grounded in a simpler Citi and you can see that we’re focused on five core businesses. Our vision goes back to our core competitive strengths and capabilities, which is being a focus around clients with global needs and being their, their trusted partner. We are the preeminent global bank in that respect, so I strongly believe in simplicity and focus. And so that is that is the bank today. It is a simpler bank. It is a more focused one. It’s going to be much better connected. And in addition to that, what we then looked at is, as I said yesterday to our investors, we took a step back and we looked at what are the different issues that have held us back and we are addressing them full on.

Fraser On Exposure To Russia And Humanitarian Side

FABER: Well as you say one of its key parts of its identity as a global bank, which brings you, brings me to current events, unfortunate events as they are. Your Russian exposure to the extent you have, it’s something like 9.6 billion about .3% of your assets, what are the expectations there? Is there going to be a write off in city’s future for those assets?

FRASER: The situation is very, very fluid at the moment in all of the world frankly at the moment right now. We are more focused on the humanitarian components. I have 200 people in Ukraine who this morning opened our bank and continued helping our clients there with payroll, with food supply, with the supply chains and bringing some of the humanitarian aid.

FABER: How long can you keep 200 people in Ukraine?

FRASER: The people are extraordinary. They’re just on a mission to try and make sure that we’re able to support the country for as long as we—

FABER: Is business still running there?

FRASER: As I say it’s more focused on humanitarian. It’s more focused on food supply and on critical supply chains. They’re in the country. I don’t think any of us know how long we’ll be able to keep going. But we are determined to do everything we can to, to sort, support the country. And then in terms of Russia, what we’re seeing there is a, there is a big unwind going for across different industries. A lot of our investors, our corporate clients are looking at what their own exposures, how do they reduce those down? Where are we going to see a decoupling of the Russian capital market, financial markets and broader economy from the rest of the world.

FABER: Anything you’re concerned about in terms of being destabilizing or any concern for potentially the European banks that may bear more of the brunt of some of those unwinds?

FRASER: I think we’re all more worried about the humanitarian side right now than the than the financial exposures for us. As I say it’s, it’s 0.3%. It matters but there are other things that are more critical. Our teams are actively managed down. They’ve been managing down the exposures that we’ve got, but we’re also very much focused on serving our clients and helping them adjust to this extraordinary and horrific situation.

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