Citi mulls further cuts to securities and banking unit
Citigroup may consider further restructuring of its securities and banking unit if the business does not see meaningful revenue recovery over the course of 2012, Chief Financial Officer John Gerspach said on a conference call.
“While we are strategically committed to securities and banking, we are not oblivious to the fact that our cost structure cannot be justified by our current revenues,” Gerspach said, according to a transcript of the call which was published by Citi.
Citi, the third-largest US bank by assets, had invested a little less than $1bn (£641m) in its securities and banking unit in 2011 but the results to date “have been disappointing,” according to Gerspach.
“We must either drive revenue growth and operating leverage or we will have to restructure, cut capacity, and cut expenses,” he added.
Earlier this month Citi said revenue in its securities and banking segment fell 29 per cent from a year earlier, excluding the accounting impact of changes in the value of the bank’s debt.
Citi’s securities and banking unit includes investment banking, private equity and hedge fund operations.
The bank took a charge of about $400m in the fourth quarter for severance costs as it slashes jobs. The bank, which has about 266,000 employees, said in December it would cut 4,500 jobs and take that charge.