The restructuring process continues at Citigroup Inc, with more changes in the works under CEO Jane Fraser, according to reports.
According to a recent report from the Financial Times and Reuters, Citigroup C, +0.34% will have five major operating units: trading, investment banking, US personal banking, wealth management and professional services. Units will report directly to Fraser.
News reports cited people familiar with the bank and said the plans have not yet been finalized.
Paco Ybarra, head of Citi’s institutional-client group, is leaving the company and his position will be eliminated, Reuters reported, citing people familiar with the bank. The Institutional-Clients group includes treasury and trade solutions, as well as markets and banking businesses, as part of its services.
A City spokesman declined comment.
Odeon Capital analyst Richard Bowe reiterated a buy rating on Citi and said the stock remains cheap relative to peers.
“putting [Fraser] Close contact with operating units gives them the opportunity to assess their business directly,” said Bowe. “The fact that this needs to be done after 53 years of rebuilding and restructuring is obviously very discouraging.”
That said, rather than using the company’s strengths and cash flow to pursue new ventures, Fraser focuses on the company’s existing strengths, such as providing core business services and trading capabilities, particularly in foreign exchange.
Looking ahead, Bove predicts that Citi will continue to shrink but said it is “rich in the operating skills it needs … and cash.”
Any further changes at Citi will follow a series of transformational moves at the bank.
Citi ended the second quarter with a headcount of 240,000, the same as the previous quarter, but it is still shedding jobs that have not yet been officially reported.
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At last check, Citi said it has signed sales agreements for nine of the 14 retail banking markets it plans to exit, including Taiwan, Australia, India, the Philippines, Thailand and Vietnam. Citi is instead focusing on wealth management and commercial banking in its international business.
The bank said on 14 August that Citi would receive a regulatory capital gain of $1.2 billion from the sale of its Taiwan consumer business to Singapore’s DBS Bank.
It also plans to sell its Mexican retail unit, Banco Nacional de México SA (Banamex), through an initial public offering in 2025.
Citi CFO Mark Mason said in June that the bank planned to cut 5,000 jobs in the first half of the year, including across its banking and markets units. In the second quarter, the bank funded about $350 million in severance costs for 1,600 people, he said.
The bank has not yet commented on any job cuts planned for the second half of 2023.
Citigroup stock was down 0.4% on Wednesday amid fresh weakness in bank stocks following S&P’s downgrade on the sector. The stock is down 9.6% in 2023, compared to a 15.1% gain by the S&P 500 SPX and a 3.7% year-to-date gain by the Dow Jones Industrial Average DJIA.
Read also: Boards at US banks and regional lenders tumble as S&P announces latest ratings downgrade
Source: www.bing.com
