Citigroup C is set to merge two key divisions in its sales and trading unit — foreign-exchange and rates businesses. This move will mark the first major overhaul after Paco Ybarra took position as head of institutional-clients group in April 2019.
The restructuring is expected to support the bottom line as the two divisions complement each other by sharing technology and corporate-sales teams and having overlapping products. Co-heads of the markets division, Carey Lathrop and Andy Morton said, "We believe this more streamlined operating model will drive better client service, risk management and profitability."
Notably, the G10 Rates Finance unit will not be merged into the new combined rates and currencies business.
Also, there has been some management shakeup under which, Nadir Mahmud, who previously looked after foreign exchange and local markets division, will work with Leo Arduini on Europe, the Middle East and Africa strategy. Arduini manages the sales and trading business in the region.
Deidre Dunn, who led Citi’s trading business in North America, will co-head rates trading with Pedro Goldbaum.
Other Wall Street Restructurings
So far in June 2019, several restructurings have been announced by Wall Street firms. Some aim at achieving cost cuts while others target to streamline and simplify their operation to focus more on core businesses.
Let’s have a look at some restructurings announced recently;
Goldman Sachs GS is integrating four separate private-investment groups into a single unit that would comprise arms investing in private companies, real estate and other hard-to-access deals with total assets worth $140 billion. The move is aimed to make Goldman’s alternative division more appealing to investors and help boost stock price.
Also, Wells Fargo WFC announced major overhaul of its Commercial Banking unit by combining Business Banking, Government & Institutional Banking and Middle Market Banking businesses. It expects to further improve customer experience through this move.
The new structure will be headed by Kyle Hranicky, who has been serving Wells Fargo for the past 25 years. It will have more than 6,000 team members across 24 divisions and 80 markets nationwide, and cater to all the financial needs of customers.
Restructuring of businesses is always good news as it reflects management’s focus on improving the company’s performance.
Citigroup continues to execute growth strategies, such as making entry into the booming digital consumer payments industry and expanding global market presence, thereby aiming to diversify revenue sources.
Over the past six months, the stock has gained 26% compared with 12.7% growth recorded by the industry.
Currently, Citi carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Another top-ranked stock in the same space is M&T Bank Corporation MTB. It has witnessed slight upward estimate revisions for current-year earnings over the past 60 days. Over the past six months, the company’s share price has been up 16.5%. It currently carries a Zacks Rank of 2.
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