Citigroup chief executive Jane Fraser is putting her own stamp on the country’s third-biggest bank with a reorganisation, calling for a change in how Citi has operated in nearly two decades, which she warned could be “very uncomfortable” for some at the company. “
Fraser, who takes the top job at the start of 2021, is trying to boost City’s sluggish stock performance. It’s down 7.6 percent since early January. Over the past 5 years, the stock has fallen by 40%, leaving Fraser behind its other big banking rivals.
The change, announced Wednesday, will eliminate a structure that split the company into two main divisions, its consumer and institutional operations. Instead, the people who lead the company’s five main business lines report directly to Fraser.
Fraser, in its efforts to downsize the giant bank, is also shedding its global consumer businesses.
“I know many of you share my frustration,” Fraser said in a memo to employees, adding that “the changes to our operations will accelerate our work to become the winning bank we all know Citi can be.”
Speaking separately at a Barclays banking conference on Wednesday, Fraser called the reorganization “the most significant change in how we’ve organized and run Citi over nearly 20 years.”
The changes will result in job cuts, although details were not available Wednesday. Citigroup employs about 240,000 people.
“We’ve made tough, important, tough decisions here,” Fraser said at the conference.
“They will not be universally popular in our bank. It will make some of our people feel very uncomfortable. I’m completely fine with that. I’m sure our strong performance will fully support these moves. It’s absolutely the right thing to do for our shareholders.”
One example she cited Wednesday was the elimination of 35 different internal committees.
“It’s time for a lot of people because it’s tearing down these layers that we don’t need,” she said. “What do I do with all my free time?”
The five core business lines that will now report to Fraser include Treasury Services, Markets, Banking, Wealth and US Private Banking. Shahmir Khaliq will run services, Andy Morton will oversee trading and Gonzalo Luchetti will oversee US private banking.
He manages the banking business, which includes investment banking, corporate banking and commercial banking.
Peter Babbage will lead the bank on an interim basis, while the wealth division will be led by Merrill Lynch’s former head of wealth management, Andy Sigg, who will start later this month.
All non-North American businesses are consolidated under the bank’s global head, Ernesto Torres Cantu.
Fraser’s executive team will now total 19 people.
“We want five of our business people at my desk who are fully engaged in the critical decisions we make every day about how we run the company,” Fraser said in a memo to employees Wednesday. “We need a structure with fewer layers and clear and direct decision-making lines.”
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