Citigroup shares fell 5.3% on Tuesday after Chair and CEO Jane Fraser said the bank would increase investments and take other actions, raising concerns about future expenses. CFO Gonzalo Luchetti indicated that severance costs in the second half of the year will exceed earlier projections, suggesting deeper job cuts after headcount already dropped by 5,000 in the second quarter to 219,000. The bank expects its efficiency ratio to be around 60% for the full year, higher than in the first half, implying expenses will rise as it reinvests revenue rather than returning it to shareholders. Fraser described the move as offensive, aimed at generating more sustainable long-term profits.
Citigroup Inc.CEO warns of higher costs from investments and staff cuts, raising expenses and lowering near-term profitability.