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Citigroup unveiled its biggest reorganisation in almost two decades that will simplify the bank’s management structure and give more control to chief executive Jane Fraser, but it also likely result in significant job cuts.

The changes come as Fraser, who took over the top role at the bank 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’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.

Fraser, in a presentation at an investors earlier in the morning, 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 of Citi’s employees “uncomfortable”, but she was “absolutely fine” with that, and committed to the changes.

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”.

Fraser also nodded to frustration over Citi’s continued also-ran status on Wall Street.

“I know many of you share my frustration that we are seriously underestimated as a bank,” she wrote in the memo. “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 lagged behind its rivals, in part because of a costly round of lay-offs cut into profits.

As part of the reorganisation, Citi will shift from having two large business units — one that focused on commercial clients and a second on its consumer businesses — to five divisions, which are 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 CEO and the business heads.

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, who had previously been 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, which is one of its five new units. In the interim, this unit will be led by Peter Babej, who had been the 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.

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 that it would release more details on the restructuring by the end of November, which will be implemented by the end of the first quarter of 2024.