[1/3]Citi CEO Jane Fraser speaks at the 2023 Milken Institute Global Conference in Beverly Hills, California, U.S., May 1, 2023. Portal/Mike Blake LICENSES
NEW YORK, Sept 13 (Portal) – Citigroup (CN) CEO Jane Fraser announced a major management shakeup that will lead to further job cuts and give her more direct control of the business as she tries to restructure the structure to simplify the bank.
The heads of the bank’s five divisions will now report directly to Fraser. They include: Shahmir Khaliq in services, Andrew Morton in markets, Peter Babej in investment and corporate banking on an interim basis, Gonzalo Luchetti in US consumer banking and Andy Sieg in wealth when he joins the firm later this month.
“We are making bold decisions to fulfill our commitments to our shareholders,” Fraser said in a statement.
The restructuring is expected to result in job cuts, but the bank has not estimated the number of job cuts or the financial impact, sources familiar with the matter said. Severance costs are expected to be incurred in the fourth quarter.
In a memo to employees, Fraser said the restructuring would “result in people changing roles or leaving the company.”
As part of the changes, the company is cutting shifts in its former divisions, Institutional Clients Group and Personal Banking and Wealth Management. International leadership roles outside of North America are being consolidated under new Head of International, Ernesto Cantu.
The new department heads will streamline the second and third levels of management, which is expected to be announced in November and January, the sources added on condition of anonymity.
Fraser and Chief Financial Officer Mark Mason will discuss the changes with investors at a conference in New York at 10:30 a.m. Wednesday. Fraser will hold a town hall next week
In the statement, Fraser said the changes “remove unnecessary complexity across the bank” and that this will help achieve the bank’s medium-term restructuring goals announced to investors.
The major restructuring is a further step in Fraser’s strategy announced early last year to improve profitability and simplify the bank. Although Citi has completed moves including divestitures, its share price has not responded. Citigroup shares are still valued at less than half book value, while rivals are priced at around 1.
Reporting by Lananh Nguyen, editing by Nick Zieminski and Jonathan Oatis
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