Citi To Merge Corporate, Investment Bank Ops
Firm outlines internal restructuring of investment and corporate banking divisions in an internal memo.
December 17, 2008
Citigroup plans to integrate its corporate and investment banking businesses into a single division, according to an internal memo obtained by IDD.
The firm will create a global banking group, which will house its investment and corporate banking professionals.
"As everyone continues to fight the headwinds of an ongoing global financial crisis and an economic downturn, we need to provide our clients with an even more coordinated and focused effort driven by a team that is committed to helping them through these difficult times," the memo's author, Ned Kelly, wrote. "We need to have a single, unified coverage force that can deliver to our clients the best advice, the best products and the best execution. The Global Banking Group will focus on our global clients and their subsidiaries around the world, certain larger local clients and key clients in particular industry groups that are not among our global clients."
Kelly, who joined Citi from The Carlyle Group as president of Citi Alternative Investments in January, will oversee the global banking group. The division will be led by the global co-heads of investment banking, Raymond McGuire and Alberto Verme, who will report to Kelly. Mark Slaughter will become chief operating officer of the global banking group, also reporting to Kelly.
The memo was cc'd to John Havens, chief executive of Citi's institutional clients group.
The new division will be organized along regional and industry lines. A source close to Citi, who requested anonymity, says the new structure will not result in any additional job losses.
"Under the new structure, coverage will be fully integrated and regionally driven with the industry and product groups providing expertise and support on a global basis," Kelly wrote in the memo. "This is largely consistent with the way we are organized today. In the US, the global industry groups, which will consist of fully integrated groups of former corporate and investment bankers, will be responsible for coverage as well as the provision of expertise and support around the world."
The memo continues, "We are working through the global industry leadership issues and the leadership team for sector coverage in the US. Additional announcements will be made shortly."
In addition, Citi will establish another division, a global credit and network management (GCNM) group, which will focus on more careful uses of the firm's balance sheet. The GCNM team will be led by Michael Roberts, who will work with McGuire, Verme and regional leaders.
Tyler Dickson will continue to head the global capital markets group and report to Kelly and James Forese, co-head of global markets, and Mark Shafir will continue to lead global M&A, reporting to McGuire and Verme (Shafir joined from Lehman Brothers in September).
"To state what should be obvious, all of those bankers with coverage responsibilities will be measured against their ability to deliver to clients all of the firm's resources and products and to capitalize on our unique platform," Kelly wrote.
Kelly also addressed the feelings of uneasiness the internal restructuring has fomented among Citi professionals.
"I also know that the anticipation of this new organizational structure has generated anxiety," he wrote. "The new structure is not intended, and should not be construed, to favor one group or another. Instead, it is intended to achieve an integration that many of you have been advocating for years and, in the process, to make us a stronger, unified firm focused on a single purpose--serving our clients as efficiently and effectively as possible."
In an article published in the Dec. 1 edition of IDD, sources close to Citi stated that client coverage within the firm's investment banking division was not clearly defined. One source told IDD, "There was a populist mentality--someone in global transaction services had just as much of a right to push the CEO of a major client as someone in M&A did."
Another source explained, "It's only been more recent that, with the top 100 to 300 [clients], they've crystallized the priority across the whole company of who's the lead client guy. That has begun with the largest companies that they cover, but it wasn't always true and I don't think it's finished yet."
Find out more information about people mentioned in this article from our People Database:
Alberto Verme
Raymond J. McGuire
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