(Reuters) -Citigroup is considering plans to reorganize the bank’s biggest division after its leader Paco Ybarra leaves next year in a move to further simplify the bank, according to a source familiar with the situation.
The bank is unlikely to replace Ybarra, the head of its Institutional Clients Group (ICG), the source said on Monday. Instead, the leaders of its three business segments – investment banking, global markets and transaction services – would report directly to CEO Jane Fraser.
The plans are still being considered and have not been finalized, the source said.
The discussions were reported earlier by the Financial Times.
The ICG unit provides financial services to institutional investors and governments. It generated more than half of Citi’s $19.4 billion revenue in the second quarter.
“The possibility of a reorg introduces some uncertainty into what is already a complex turnaround,” R. Scott Siefers, an analyst at Piper Sandler, wrote in a note.
The change in reporting lines directly to the CEO “would preserve strategic continuity, streamline layers, and presumably eliminate the possibility of a new head who might want to pivot the unit’s direction,” he wrote.
Ybarra is set to leave in the first half of 2024, according to an internal memo seen by Reuters earlier this month. The company also said at the time it was determining how to pass on his responsibilities while simplifying its organizational structure in the coming months.
Citigroup declined to comment on the report.
Its shares fell 0.6% alongside a broader decline in the S&P bank index, which dropped 0.5% in Monday trading.
(Reporting by Tatiana Bautzer and Saeed Azhar in New York, Lavanya Ahire in Bengaluru; Editing by Dhanya Ann Thoppil, Hugh Lawson and Mark Potter)
Brought to you by www.srnnews.com