Citigroup (C) Nears End of Its Organizational Revamp Efforts
Citigroup Inc. C announced the completion of major actions to simplify its operating structure and improve performance, which were initially announced in September 2023.
Per management, “after having reset Citi’s strategy and undergone these consequential changes, we will continue to execute on our vision to be the preeminent banking partner for institutions with cross-border needs, a global leader in wealth and a valued personal bank in our home market and focus on our commitment to transform the company for the long term."
According to Reuters, which cited a company memo sent to employees, the largest round of staffing moves, including reassignments and exits, will be shared with Citigroup employees this week.
The reorganization trims management layers to eight from 13 and its global workforce by 20,000 over the next two years. Since September, the company has eliminated 5,000 jobs.
Along with its fourth-quarter 2023 results released in January, the company remarked on reducing 1,500 managerial roles, comprising 13% of its worldwide leaders. It was then projected to create annual savings of $1 billion. Such efforts will make the decision-making process swifter, drive increased accountability and enhance the focus on clients.
The company is also progressing on its major strategic action to exit the consumer banking business in 14 markets across Asia and the EMEA. The bank has closed sales in nine markets, including Australia, Bahrain, India, Malaysia, the Philippines, Taiwan, Thailand, Vietnam and Indonesia. It has also substantially wound down the consumer banking business in South Korea, Russia and China. Also, the company has restarted its sale procedure in Poland.It remains on track to separate its Mexico business thorugh an IPO for its in 2025.
Such exits will free up capital and help the company pursue investments in wealth management operations in Singapore, Hong Kong, the UAE and London to stoke fee income growth.
Notably, earlier this month, Citigroup’shead of global wealth, Andy Sieg, announced that the company plans to expand its wealth management business in the Greater Bay Area and the rest of Asia from its base in Hong Kong. The move is part of the bank’s plan to tap into the growing wealth in Asia, particularly leveraging Hong Kong’s financial hub status.
Over the past six months, shares of Citigroup have gained 24.5% compared with the industry’s 15.9% growth.
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Currently, the company carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Expansion Efforts by Other Companies
UBS Group AG UBS intends to expand its wealth management business in the United States over the next three or four years on the back of mergers and acquisitions. The news was reported by Reuters and cited an interview of UBS chairman, Colm Kelleher, with the NZZ newspaper.
This strategic approach reflects UBS Group’s commitment to expanding its footprint in the U.S. market and further strengthening its presence in the wealth management space.
Franklin Resources, Inc. BEN officially launched its operations in Saudi Arabia after obtaining two licenses from the country’s regulator, thereby expanding its footprint internationally.
Franklin obtained a “Managing Investments and Operating Funds” license and an “Advising” license from Saudi Arabia’s Capital Market Authority. The move comes when Saudi Arabia seeks to draw more foreign businesses to open up offices through its regional headquarters program as part of its economic transformation initiative ‘Vision 2030.’
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