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Citigroup unveiled its biggest reorganisation in almost two decades, handing more control to chief executive Jane Fraser, simplifying its management structure and cutting jobs.
The changes come as Fraser, who took over the top role at Citi in 2021, battles to turn around the third-largest US bank by assets, which for years has lagged behind peers and been dogged by operational and regulatory issues.
Citi will shift from having two large business units — one focused on commercial clients and the other on its consumer businesses — to five divisions made up of its primary business segments.
The heads of those five units will report directly to Fraser, eliminating a previous layer of management between the chief executive and the business heads.
Fraser called the restructuring the “most consequential changes” she has made to the management of the bank. She said she was aware the scale of the moves would make many Citi employees “uncomfortable”, but added she was “absolutely fine” with carrying through the changes.
Citi’s shares were up 1.8 per cent at midday in New York on Wednesday after the news. The Financial Times last month reported the bank was considering revamping its organisational structure following the retirement of Paco Ybarra, one of its top executives.
In a memo to staff, Fraser said the reorganisation would “eliminate needless complexity” but acknowledged it would result in “saying goodbye to some very talented and hard-working colleagues”.
In a reference to Citi’s continued also-ran status on Wall Street, she added: “I know many of you share my frustration that we are seriously underestimated as a bank . . . The opportunity in front of us is enormous, and these changes to how we operate will accelerate our work to become the winning bank we all know Citi can be.”
The bank’s most recent results trailed its rivals, in part because a costly round of lay-offs cut into profits.
Citi said no final decision had been made on the number of jobs that would be eliminated as part of the restructuring. The bank said it was starting a 30-day period that would realign the businesses, and would release more details by the end of November on the restructuring, which will be implemented by the end of the first quarter of 2024.
Geographically, the bank will be organised around its US and non-US businesses, instead of having regional heads. The bank said the new international unit will be headed by Ernesto Torres Cantu, previously head of Citi’s Latin American operations.
Citi also said it was launching a search for a new head of its corporate, commercial and investment bank, one of the five new units. In the interim, this operation will be led by Peter Babej, who had been head of Citi’s businesses in Asia. The bank said Babej was expected to retire some time next year, following the naming of a head of banking.
The four other units — wealth management, transaction services, markets and its US consumer bank — will be managed by their current leaders.
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