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Citigroup unveiled its biggest restructuring in nearly two decades, handing more control to Chief Executive Jane Fraser, simplifying its management structure and cutting jobs.
The changes Fraser, who took the top job at Citi in 2021, is struggling to turn around the third-largest U.S. bank by assets, which has lagged peers for years and has been plagued by operational and regulatory problems.
Citi will move from having two major business segments – one focused on commercial clients and the other on its consumer businesses – to five segments comprising its primary business segments.
The heads of those five divisions will report directly to Fraser, eliminating previous layers of management between the CEO and business leaders.
Fraser called the restructuring “the most consequential changes” he has made to the bank’s management. He said he knew the scale of the moves would make many City employees “uncomfortable” but said he was “absolutely fine” with implementing the changes.
Citi’s shares rose 1.8 percent in New York on Wednesday after the news. The Financial Times reported last month that the bank was considering restructuring its corporate structure following the retirement of one of its top executives, Paco Ybarra.
In a memo to staff, Fraser said the restructuring would “remove unnecessary complexity” but acknowledged it would mean “saying goodbye to some talented and hard-working colleagues”.
In a reference to Citi’s continued position on Wall Street, he added: “I know many of you share my frustration that we are seriously undervalued as a bank … The opportunity before us is enormous, and these changes to the way we operate will help Citi become a winning bank.” Speeds up work.
The bank’s most recent results trailed its rivals as a string of costly layoffs cut into profits.
City said no final decision has been made on the number of jobs that will be eliminated as part of the new restructuring. The bank said it would begin a 30-day period to restructure the businesses and release more details on the restructuring by the end of November, which would be implemented by the end of the first quarter of 2024.
Geographically, the bank will be organized around its US and non-US businesses, rather than having regional leaders. The new international division will be headed by Ernesto Torres Cantu, who previously headed Citi’s Latin American operations, the bank said.
Citi also said it will begin a search for a new head of its corporate, commercial and investment banking, one of five new units. In the interim, the operation will be led by Peter Babbage, who was Citi’s commercial head in Asia. Babbage is expected to retire next year after being named bank chairman, the bank said.
The other four units – Wealth Management, Transaction Services, Markets and its US Consumer Bank – will be managed by their existing heads.
