October 9, 2024 | Premium Service | For some time now, we have been watching the slow progress of Jane Fraser, CEO of Citigroup (C), in shaping up the operations of the $2.4 trillion moneycenter bank. A big part of the cost-cutting process began before Fraser became CEO in 2021. Her successor exited the bank’s residential mortgage business back in 2017 and sold Smith Barney to Morgan Stanley (MS) in 2015. Both were bad trades for Citi, IOHO.
Cutting the servicing operation left Citi trailing JPMorgan (JPM) as the largest loan servicer in the US. Citi got out of the business of servicing mainstream government and conventional loans, but JPM built a large and profitable business servicing prime jumbo loans. Citi left the market, while JPM went upmarket and invested heavily in its own platform.
