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Mike Mayo had a triumphant tone on the Citi earnings call.
The Wells Fargo analyst has been calling for Citi to divest its Asian consumer businesses with such regularity and belligerence that it had become something of a running gag in the industry.
Yesterday, he got his way, as new chief executive Jane Fraser announced plans to get out of 13 Asian and EMEA consumer franchises – including China.
“What are you, 45 days in the job?” he asked Fraser. “I guess you’re not wasting any time.” He would later call it the boldest step since Sandy Weill was CEO.
“I’m going to have to think of new questions,” he added.
Fraser’s bold move, a classic new-CEO-new-broom play, makes perfect sense when viewed through the sharp New York lens of Fraser, Mayo, their peers and Citi’s institutional investors.
I’m going to have to think of new questions
Mike Mayo, Wells Fargo
From that vantage point, the logic goes like this: Citi lags JPMorgan, Goldman Sachs and other banking leaders on any return metric you like to mention – Citi’s preferred approach is return on invested tangible capital – and something must be done about it.
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