NEW YORK, April 9 Reuters Citigroup investors have rewarded CEO Jane Fraser with a share price boost after Fraser announced a sweeping overhaul of Citis sprawling structure in September, cutting costs by laying off 5,000 employees. Next, they want to see growth in wealth management and investment banking.

Wall Street investors have welcomed Fraser39;s overhaul, but warned the CEO has major challenges ahead to boost returns and catch up with rivals, including regulatory problems, lackluster earnings and an unsettled workforce.

If this was a chess game, I would say the opening phase is over, and now the middle phase begins, said Peter Nerby, an analyst at ratings agency Moody39;s.

Citi39;s stock is so depressed that it is hard to lose money betting on it, said Daniel Babkes, portfolio manager at Pzena Investment Management, which manages more than 60 billion and owns Citi shares.

We are confident the bank can control expenses after the reorganization, and it has strong growth prospects in corporate banking, he said.

Citigroup shares rose 49 since it announced the overhaul in midSeptember, outpacing a 26 climb for the KBW bank index. The bank39;s stock trades at 0.57 of book value, a measure of performance that falls short of JPMorgan Chase39;s 1.73 or Bank of America39;s 1.1.

But the company39;s turnaround efforts also caused internal turmoil. Workers avoided signing up to longterm projects during the sixmonth reorganization because they were unsure if they would…