- Key insight: Citi has set two profitability targets, one near-term and one medium-term, as it sets growth and performance expectations for the next five years.
- What's at stake: Citi's multiyear strategic overhaul has been focused on sustainable growth and higher, more consistent shareholder returns. The path laid out Thursday is the way to get there, CEO Jane Fraser said.
- Supporting data: The bank aims to achieve a return on tangible common equity of 11%-13% in 2027 and 2028. That would be an improvement from 2025, when the metric was 7.7%.
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Citi rolled out its blueprint Thursday to drive sustainable growth in coming years, setting new, higher profitability targets and announcing plans to buy back $30 billion of common shares.
The third-largest U.S. bank by assets, which has been in overhaul mode for several years, expects to achieve a return on tangible common equity of 11%-13% in 2027 and 2028, CEO Jane Fraser said at Citi's first investor day in four years. That's higher than the 10%-11% return that Citi said it's on track to achieve by the end of this year.
The metric is used to shine a light on a bank's overall performance. Between 2029 and 2031, Citi said it's setting an even higher goal, expecting the return to fall between 14% and 15%.
Most analysts had been expecting Citi to announce return targets ranging from 12%-15%. For all of 2025, Citi's return on tangible common equity was 7.7%. It was 13.1% for the first quarter of 2026.
Initial responses to Citi's new plan were muted. Shares of the bank's stock were up less than 1% in mid-morning trading. The return on tangible common equity goal "was underwhelming in the near term," Gerard Cassidy, an analyst at RBC Capital Markets, said in a research note.
The path to a return on tangible common equity of approximately 14%-15% "was not as rapid as we were hoping, but directionally it is moving in the right direction," Cassidy wrote. He did call the $30 billion repurchase authorization, which is a multiyear endeavor, "a clear positive."
Fraser kicked off Citi's investor day Thursday with a 30-minute overview of what the bank has achieved during her tenure as CEO, and where it is heading in the back half of the decade. During the past five years, the $2.8 trillion-asset bank has simplified itself by selling or winding down consumer franchises in underperforming markets, reducing management layers and defining five core businesses. It has also improved risk management and internal controls.
"From the start, this was about more than just fixing the old Citi," said Fraser, who took the helm at Citi in March 2021. "It was about building the bank the next decade demands."
She compared the process of transforming Citi to rebuilding an engine.
"The question now isn't whether the engine works," Fraser said. "It's what it can do from here."
Citi's investor day, which is taking place in New York, is scheduled to run until early afternoon. The leaders of each of Citi's five businesses are presenting their growth plans before newly appointed Chief Financial Officer Gonzalo Luchetti speaks.
The event ends with a question-and-answer session.
