Citi Has Built 'A World Class Investment Bank' - Really ?

Another restructuring announced at Citi, and yet again it involves the corporate and investment banking units. What's interesting about this one though is that Edward 'Ned' Kelly, who runs global banking, claims that Citi has 'built a world class investment bank'. Right, the same investment banking unit that wrote down billions, lost billions and caused the firm to go cap in hand to the US government for a bailout! Absolutely 'world class'.

Anyway, here's the memo:

To: Global Banking
From: Ned Kelly

'During the past decade Citi has maintained its leadership in corporate banking and built a world-class investment bank. Our capabilities in both corporate and investment banking extend to the newly emerged markets of Asia Pacific and Latin America, as well as the more traditional markets of the US, Europe and Japan. 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.

Accordingly, I am pleased to announce a new organizational structure that will make us more efficient, effective and responsive. The Global Corporate Bank and the Investment Bank will merge to form one Global Banking Group. 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.

The Global Banking Group will be organized along both global industry and regional lines and be led by Ray McGuire in New York and Alberto Verme in London and Dubai. Ray and Alberto will report to me as will Mark Slaughter, who will be the Chief Operating Officer of the Global Banking Group.

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. 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. 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. I have attached a schematic that displays this industry/regional coverage and global industry/product matrix.

Our global product leadership will remain the same with the addition of one important group.

Michael Roberts will lead a new Global Credit and Network Management group ('GCNM') reporting to me. GCNM will focus on the prudent, optimal use of our balance sheet, which is becoming an increasingly valuable resource. Credit is no longer a commodity, and we should make every effort to capitalize on its renewed importance in light of our special capacity to deliver it. We should use it to support our strongest relationships and to build others that are key to our future. Michael will also work with Ray, Alberto and our regional colleagues to ensure that we continue to deliver the full range of our traditional banking products to our core clients across our global platform. This is critical. We must be sure that the new organizational structure strengthens our core banking business and the global network that is so important to so many of our clients.

Tyler Dickson will continue to lead the Global Capital Markets Group and report to me and Jamie Forese. Given the capital and funding issues facing virtually all of our clients in this environment, I expect that all of us will work as closely as possible with Tyler and his team to deliver our capital markets products as seamlessly and effectively as possible.

Mark Shafir will continue to lead Global M&A and report to Ray and Alberto.

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.

I know this has been a difficult period. The events of the past several months would have been inconceivable even six months ago and the markets seem to bring new surprises each day. I also know that the anticipation of this new organizational structure has generated anxiety. 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. A spirit of partnership and mutual respect will be crucial to achieving this goal. I plan to enforce those values, and I expect all of you to join me in that effort. It is up to 'us' to make this work.

The challenges we face are real. But we have a team that is as capable of meeting them as any team in the world. We just have to work together in the ways that are most productive for us, our clients and our shareholders.

I look forward to working together with all of you to make the most of the great franchise we are privileged to have'.

Source - Dealbreaker

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