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Citigroup is preparing to strip out five layers of management as part of the sweeping overhaul unveiled by chief executive Jane Fraser in September.
The bank said that it has pared back 15% of functional positions within its top two executive layers and has plans to reduce its current 13 layers of management to eight. The changes were laid out in a presentation accompanying its third-quarter results.
Fraser unveiled a sweeping overhaul of its business in September, which will see its institutional client group disbanded. The firm is reorganising around five key units, has stripped out regional chief executives and has plans to reduce co-head roles across the organisation.
The aim is to simplify Citigroup, which has typically lagged its Wall Street peers and faced penalties from regulators over its controls in recent years, as well as hand more oversight of key functions to Fraser. She said they were the most consequential changes at Citigroup in two decades.
However, the changes are expected to lead to job cuts across the organisation. Citi has already flagged that some roles are under review — including 250 within its London operation — and it will unveil new leaders within the structure by November.
READ Citigroup to review 250 London jobs as CEO Jane Fraser’s overhaul kicks off
“Last month we announced consequential changes that align our organizational structure with our strategy and changes how we run the bank,” Fraser said in a statement. “When completed, we will have a simpler firm that can operate faster, better serve our clients and unlock value for our shareholders.”
Citigroup’s investment banking fees jumped 34% in the third quarter as a surge in capital markets revenue offset an ongoing slump in M&A work.
The US investment bank posted $844m in dealmaking fees during the third quarter, an increase of 34% as debt capital markets revenue nearly quadrupled from the same period last year while equity underwriting fees jumped 32% to $132m. However, the $309m revenue from M&A work, while ahead of market expectations, was down 21%.
Rival JPMorgan posted a 3% decline in dealmaking fees, with advisory revenue down 10% to $767m in the third quarter.
Overall revenue at Citigroup in the third quarter was $20.1bn, which was ahead of market expectations.
The ongoing deal drought has forced banks to make deep cuts to their business. Citi stripped out 5,000 jobs in the first half of the year, while Goldman Sachs and Morgan Stanley have both cut thousands of jobs.
Citigroup’s fixed income revenue jumped 14% to $3.6bn for the period, while its smaller stock trading unit was down 3% to $918m.
To contact the author of this story with feedback or news, email Paul Clarke
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