The media reports that currently, the chief executive officer of Citigroup Jane Fraser is considering the possibility of creating a plan to break up the largest unit of this corporation as part of a restructuring strategy.
According to the information that journalists received from people familiar with what is happening inside the corporation and is a secret to the general public, a potentially possible separation will give the unit more power.
Currently, Citigroup is exploring options for implementing a decision to split up an institutional clients group (ICG), whose share in the profit structure of the banking sector giant amounted to almost 75% last year. Insiders claim that the plan under consideration by the corporation provides for the creation of three separate functional branches on the basis of the unit, which will specialize in investment and corporate banking, activities in global markets, and the provision of transaction-related services.
The heads of the new working groups will report directly to Jane Fraser. If the plan currently being studied is implemented, it will be the largest decision in the context of restructuring in almost 15 years.
The ICG unit reported revenue of $41 billion by the end of 2022. In July, the corporation reported that for the second quarter of this year, the revenue of this structural element in the overall functional construction of the banking giant showed a decrease of 9% year-on-year. This indicator is a kind of reflection of the decline recorded in the markets and in the investment banking sector. At the same time, the income received as a result of the provision of services has a positive trend. Jane Fraser reported that treasury and trading solutions, and securities services, increased by 15% in terms of profitability.
The corporation began to explore options for a restructuring strategy after it became known in August that Paco Ybarra, one of the chief deputy CEOs, would leave Citigroup after 36 years of work. He worked on investing as part of achieving the banking giant’s goal of increasing profitability. Financial injections were directed to the most profitable sectors of the corporation’s business structure, including treasury and trading solutions, and securities services.
As we have reported earlier, Citigroup Fixes Personal Banking Revenue Growth in US.