Yearly advancement at Citigroup observed to be sporadic following corporate restructuring
In 2020, Citi underwent a significant reorganisation, aimed at streamlining operations and refocusing on core banking businesses. The reorganisation was designed to improve efficiency and competitiveness, with a particular focus on addressing operational complexity, technology modernisation, risk management, and regulatory compliance.
Last year, Citi spent $12.2 billion on technology, with more than half going towards modernisation initiatives. However, the reorganisation efforts resulted in a pair of enforcement actions in 2020, as the bank received penalties totaling $135.6 million from the Federal Reserve and the Office of the Comptroller of the Currency. The regulators admonished Citi for failing to make sufficient progress on data quality, risk management, and internal control issues.
Citi's executives, including CEO Jane Fraser, have called the bank's transformation the top priority. They are committed to investing whatever's necessary to resolve the consent orders and strengthen risk and controls. As a result, the bank is likely to do more hiring in the second half of the year.
While progress has been made, there are still ongoing challenges. Citi is considering how it approaches data from an end-to-end point of view, with a focus on improving data quality and ensuring robust risk management. The bank is also working on harmonising global operations and managing legacy costs.
Meanwhile, Citi's efforts to modernise its technology have been met with penalties, as the bank's endeavour to modernise its technology was cited as a reason for the penalties imposed by regulators.
Elsewhere, Wells Fargo, another large bank, has also been undergoing a transformation. Since CEO Charlie Scharf took the helm five years ago, six of the eight remaining consent orders against the bank have been lifted. Wells Fargo expects non-interest expenses to total $54 billion for the year, with the increase in expenses due in part to higher operating losses and customer remediation costs.
Wells Fargo CFO Mike Santomassimo discussed the bank's progress at the Barclays conference, noting the evolution of language used by executives regarding the asset cap on the bank. He also emphasised the bank's focus on getting regulatory work done in a high-quality manner.
Barclays analyst Jason Goldberg believes most of the lingering expenses from Wells' post-scandal reshuffling have been addressed. However, without recent data and updates, it is difficult to substantiate the exact progress and remaining issues for both Citi and Wells Fargo post-2020 reorganisation.
For a more detailed understanding of Citi’s reorganisation outcomes, reviewing Citi’s recent investor presentations, earnings calls, or regulatory filings directly would be necessary. Similarly, for the most up-to-date information on Wells Fargo's progress, one should refer to the bank's official announcements and filings.
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