Citigroup is considering plans to reorganize the bank’s largest division after its head Paco Ybarra left the organization next year in a bid to further simplify the business, according to a source familiar with the situation.
The bank is unlikely to replace Ybarra, the director of its Institutional Clients Group (ICG), the source said on Monday. Instead, the heads of the three business segments – investment banking, global markets and transaction services – would report directly to chief executive Jane Fraser.
The plans are still under review and according to the source have not yet materialised.
The Financial Times previously reported on the talks.
The ICG entity provides financial services to institutional investors and governments. In the second quarter, the company generated more than half of Citi’s $19.4 billion in revenue.
“The possibility of a restructuring introduces some uncertainty into an already complex reversal,” R. Scott Siefers, an analyst at Piper Sandler, wrote in a note.
Changing direct reporting lines to the CEO would “maintain strategic continuity, streamline tiers and presumably eliminate the possibility that a new boss might want to change the direction of the unit,” he added.
According to an internal memo seen by Reuters this month, Ybarra will step down in the first half of 2024. The company also said at the time that in the coming months it would consider how to transfer its responsibilities while simplifying its organizational structure.
Citigroup declined to comment on the report.
Its shares fell 0.6%, accompanied by a broader decline in the S&P Banking Index, which fell 0.5% in Monday trading.