Citigroup Inc., the world's biggest stock and bond underwriter, on Tuesday said it split its global corporate and investment bank into three groups to simplify its structure and win new business.
The New York-based company said it divided the unit into banking, capital markets and global transaction services groups. Robert Druskin will remain the unit's chief executive, having been named in December.
The corporate and investment bank last year boosted profit 71 percent to $5.39 billion, accounting for 30 percent of Citigroup's $17.9 billion of overall profit. It arranged $542.7 billion of stock and bond offerings, ranking first, and advised on $219.6 billion of mergers, ranking third behind Goldman Sachs and Morgan Stanley, according to Thomson Financial data.
Citigroup, which competes with investment banks such as Goldman and Morgan Stanley, and other commercial banks such as J.P. Morgan Chase & Co., is trying to win business at a time equity markets are rising, interest rates remain low, and merger activity is expected to rise.
"We're not doing this to fix anything that is broken," Druskin said in an interview. "The point for us ... is to match our capabilities with our client needs."
Druskin declined to say how jobs would be affected, but said: "This is not a headcount reduction exercise.... If an organization becomes more streamlined and more focused, you reduce the number of individual silos outstanding and promote efficiency, both for us and for our clients."
New Positions
Michael Klein will be head of banking, overseeing client-facing banking groups and coordinating corporate client coverage. Citigroup said this group will consist of the global relationship bank, headed by Alan MacDonald; emerging markets corporate banking, headed by Suneel Bakhshi, and a new investment banking chief to be named soon.
Tom Maheras will be head of capital markets, which will oversee all of the unit's sales, trading and capital markets businesses. Reporting to him will be equities chief James Forese; two new co-heads of fixed income, Randy Barker and Geoff Coley, and municipal securities chief Ward Marsh.
This "effectively puts the equities and fixed-income businesses under common management" as at some other banks, Druskin said. "Putting them under common management is a good idea because many clients buy more than one product from us."
Frank Bisignano will still oversee global transaction services.
Robert Morse, now head of the investment bank, is returning to Asia to be head of Citigroup's Asia Pacific global corporate and investment bank, succeeding Stephen Long. Bill Mills will be head of the global corporate and investment bank in Europe, the Middle East and Africa, succeeding Klein.
Stan Fischer, now vice chairman of Citigroup and president of Citigroup International, will become head of a new sovereign clients group, overseeing global business relationships with sovereign and multilateral clients.
Morse, Mills and Fischer will report to Druskin and Deryck Maughan, Citigroup International's chief executive.
