Finance

Jane Fraser just detailed plans for building out Citi’s retail bank in the US, and it includes leveraging co-branded cards with partners like American Airlines and Home Depot

  • Citi CEO Jane Fraser said the bank wants to grow its retail footprint in the US.
  • ‘There is no silver bullet,’ Fraser said at virtual conference on Friday.
  • Citi is the fourth-largest bank by assets in the US but ranks 15th in branch count.
  • See more stories on Insider’s business page.

Jane Fraser’s first major move as CEO of Citigroup in April was to take aim at the bank’s extensive consumer business in Asia and Europe.

During Citi’s first-quarter earnings, Fraser said the retail bank was departing from 13 franchises — including markets like China, India, Australia, and Russia — to allow the bank to “double down on wealth” efforts across Asia and Europe.

However, Citi isn’t looking to shrink its entire retail business.

Instead, the bank wants to refocus its banking sights on growing in a market where its branch footprint remains relatively small: the US.

“As we look at the divestitures in Asia, that will also enable us to have more focus on the home market, and also some of the resources, both talent and financial, to bring to bear in the US,” Fraser said Friday while speaking at Bernstein’s annual strategic decisions conference.

Fraser isn’t giving up on Citi’s physical branches in the US

For Fraser, the exit from the Asian and European consumer markets resembled a similar move she orchestrated as head of Citi’s Latin American business in the mid-2010s. Under her watch, the bank departed consumer markets in key countries across the region to pivot to a more concerted effort on building out banking operations in Mexico.

“I personally saw the benefit of that, when we exited the Latin America markets and then put the focus onto Mexico, and we went from teenager returns to high 20% returns in Mexico, with further to go from that,” Fraser said.

“That’s what we’re looking at doing in the US,” she added.

Part of that focus, according to Fraser, will involve growing, or at least maintaining, Citi’s bank branches in the US — “I don’t believe branches are dead yet,” she said — even as the bank also builds out its digital banking capabilities.

“We will look at some growth in our footprint in the States. You’ll certainly see us having a branch footprint that remains, but we are definitely seeing a lot more dynamism on the digital front,” Fraser said.

Citi is the fourth-largest bank in the United States by assets, according to the Federal Reserve, but ranks 15th in branch count domestically. It has the most international branches of any bank in the US, meanwhile, with more than four times as many as its closest competitor, JPMorgan Chase.

Citi’s first-quarter revenue in its North American consumer bank was $4.43 billion, representing a 15% year-over-year drop. Globally, the bank reported $7.04 billion in revenue, a 14% year-over-year decrease.

Citi has big plans for co-branded cards

Part of that US growth, Fraser also said, will come from Citi’s “strength in our cards and our relationships we have with partners.”

“We have a number of different partnerships. I see that as being an embedded finance model, as parts of the consumer business unbundle off the old architecture and rebundle around the new digital architectures,” she added.

As examples, Fraser pointed to Citi’s partnership with American Airlines to offer co-branded travel rewards cards, as well as retail ventures like Citi’s Home Depot-branded card business.

“We’ll look at, ‘How do we make that a deposit proposition, not just a card, and a consumer-lending proposition, not just a card proposition,'” she said.

To underscore her point, Fraser added that she was open to suggestions before providing her email to those listening in to the conference.

“There is no silver bullet. We’ve recognized we want to be larger, both to tackle funding as well as to get to a greater scale in the US,” Fraser said.

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