Citigroup Inc. said in an internal memo that it is shutting down its municipal underwriting and trading units by March 31, 2024, as part of an overall effort to boost efficiency and cut costs.
Most of Citi’s municipal sales, trading and banking staff are leaving the bank, according to the memo, which was provided to MarketWatch and was initially reported by the Wall Street Journal.
“The economics of these activities are no longer viable given our commitment to increase the firm’s overall returns,” Andy Morton, head of markets, and Peter Babej, interim head of banking, said in the memo.
It’s not clear how many employees will be affected by this move, which comes as part of a round of job cuts already under way at the bank.
Citi has said it is working to streamline operations under Chief Executive Jane Fraser, with plans to provide more head-count details in the bank’s fourth-quarter results, due out on Jan. 12.
Reports had surfaced recently that Citi’s municipal-bond unit could be cut.
Citigroup’s stock
C,
fell 0.2% in premarket trading Friday after rising by 1.8% in the previous session.
Citi has been conducting a review of its U.S. municipal business over the past several months, the memo said.
The decision to wind down its municipal underwriting and market-making activities was “difficult,” the bank said, but it will refocus on other efforts related to state and local government.
“We will maintain and further develop our investment banking activities in key sectors of public-private partnership including transportation, healthcare and clean energy,” the bank said. “Citi has been active in the private placement market and we see opportunities to grow as the wallet expands.”
The bank said it will also deploy liquidity and its investment portfolio to buy municipal bonds that support efforts to finance physical and social infrastructure.
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