Citigroup Inc. (NYSE:C) has announced plans to exit its municipal bond business by the end of March 2024, affecting approximately 100 employees, according to an internal memo. The decision to dismantle the municipal bond business comes after a thorough review, and Citigroup executives cited the economic viability of the activities as a key factor in the move.
The decision to exit the municipal bond business is part of Citigroup’s broader strategy to focus on core strengths and enhance overall returns. New capital requirements and regulatory constraints, including restrictions in certain states due to the bank’s firearms policies, have contributed to the decision. Citigroup will continue to work with state and local governments on infrastructure projects through public-private partnerships and the private placement market. Additionally, the bank will continue to purchase municipal bonds and support affordable housing projects.
The move aligns with Citigroup CEO Jane Fraser’s strategy to streamline operations and focus on serving large multinational corporations. Since April 2021, Citigroup has been emphasizing growth in core businesses, including wealth management and personal banking, while shrinking international operations. The exit from the municipal bond business is consistent with Fraser’s efforts to simplify the bank’s governance structure and increase operational efficiency.
As part of the organizational realignment, Citigroup has been eliminating various management layers and roles, with job cuts affecting around 10% of senior manager roles, totaling approximately 300 managers. The restructuring aims to enhance accountability and streamline decision-making processes.
Citigroup’s shares have gained 3.1% in the past six months, reflecting ongoing efforts to refocus and strengthen the bank’s core operations.
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