Citi is done, thanks Fraser

Citi houston group falling apart is such a shame. Why would Fraser destroy one of Citi’s top groups? 

Agree Houston has had a big exodus

I'm not impressed with her thus far at all

That said, I do think (hope) this stream-lining is a good thing of getting rid of some of the unnecessary heads of various clusters that just cause more complexity.

At the group level, our group head effectively thought it was a non-issue for IB and CB for the most part.

Apart from Dimon, leadership across the board has been rough.

Honest question - is Citi a takeover target? I get that there are antitrust considerations. But at $80bn market cap, it’s not exactly a behemoth and well in the range of another BB. And at sub-BV, an argument could be made there is value there?

Worked at Citi for 4 years and left shortly after Fraser arrived (I was in markets not IB)

I’d never seen such bloated dysfunctional bank with poor middle management spending all day stealing each other’s P&L…

if she can cut through that crap more power to her… won’t be done in a few years though

Citi is the epitome of the failed concept of a « universal bank » trying to do everything and being mediocre at most

at its core Citi is now a trade finance bank - that’s the recurring / low risk business that investors love, they have some very good groups here and there (p&u, aviation) but it just doesn’t have the DNA of a BB

Was waiting for someone to post on this... it's so mad how they're so bloated with so much middle management and yet they keep on firing / cutting the wrong people over and over again. 

Unbelievably badly run - it's only time before they fall and get bought out. Has to be, it's trading at 0.44 price-to-book ratio. 

That middle eastern money are very excited to put their hard earned petro dollars to make a mark in US financials. I don't fully understand why, but their SWFs want to make a move fast.

Agree with the sentiment. Citi has really struggled to find itself and this change really came out of nowhere. Several genuinely great people are being forced out and not really sure what value it will bring.

The bank hardly gets the basics right, a mixture of under investment and poor hiring strategies. I feel like it was a BB bank pre-financial crisis because of its balance sheet. The current talent now across IB and CB is dire, hardly any personality and dry (some in London struggle to speak English). I would describe the london office as a European bank. No issues with this, but we really struggle to win key deals based on the relationships some bankers have with clients. At the end of the day you need both intelligence and sound relationship to win mandates.

Regarding the woke comment…. I mean all the business heads are men and all but 1 are white men. I think you’re safe from the woke brigade 😂

Citi is only attractive if you are an EM employee looking for a better life. Stay long enough and you can move from Mumbai to New York. They’ll stick you on a work visa so you cant leave for x years. It’s an easy win for them.

I used to work at Citi (London). There was a lot of woke nonsense (think I remember specifically for black history month our $1m a month black CFO sent round a firm wide email about how oppressed he was…) but I’m not sure that’s why it’s trading so badly. I suspect it’s more to do with poor retail and WM exposure and higher reliance on more volatile IB/trading revenue. Our financing capabilities were also really bad, we had a lot of risk management hoops in Europe to jump through that it seemed other banks didn’t have and were never able to offer competitive staples so we lost a lot of deals. I’m also not a FIG analyst and I never worked in New York where I suspect most of the money is made, so could be completely off.

IBD had layoffs today across multiple groups

What happened to the Citi houston group? As someone who has a good friend interested in energy trading, specifically in Houston. 

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She didn’t take it down.  It’s been a dumpster fire for at least 15 years.  

This post is absolute bullshit - sounds like OP is bitter because they will likely be RIFed. Fraser is eliminating a useless layer of management, and selling the businesses that aren't doing well. She's also getting rid of BS committees that just hold up deals. The only reason there is any disagreement about this approach is simply that people don't want to get fired or have to change roles because they prefer to remain in the same seats they've been for 30 years taking up headcount and producing nothing. 

I have no idea what OP means by woke stuff. Citi regularly gets protested for "putting profits over the environment." 

This thread has triggered several of us in the office so I'm summarizing the water cooler talk below. I try to avoid being duplicative to other comments on this thread but frankly some sentiments seem to be widespread.

First of all if you didn’t think Citi could go any lower, you’re dead ass wrong and it is NOT a value play. Make no mistake about it, Citi is absolutely going further downhill. Frazer’s leadership is abysmal. The energy franchise is merely the first data point in her short tenure as CEO. To allow that team - the ONLY IB team at Citi that consistently ranked in the top 3 of their respective sector - to disintegrate, says everything about her intentions. That kind of overall IB performance should be absolutely unacceptable for a bank the size of Citi, so doing anything other than protecting the good and fixing the bad is a God awful strategy.

But she’s a McKinsey brat dressed up as a Consumer Banker, and that leads me to my next comment. She has one-dimensional banking knowledge, lacks leadership acumen, and lacks the selflessness required to develop a comprehensive vision for a bulge bracket that’s in the best interest for shareholders. Instead, everything she does is self-serving and political in nature, to the point where she forces company strategy to conform to the current mainstream winds. Her anti-O&G rhetoric on day one of her CEO tenure? Political. Making us the first bank to mandate the COVID vaccine to all employees? Political. That last one was particularly hypocritical if not comical for a person who advocates “my body my choice” when it comes to women’s rights but conveniently temporarily suspended such beliefs by threatening termination to employees that did not show proof of vaccination by a specific date. Indeed, her guiding principles are her political aspirations and strong desires to be accepted into those inner circles, so whether you’re a shareholder or employee at Citi, it would be in your best interest to remember that as long as she’s at the helm. It will explain her every selfish move.

Which brings me to what happened in Houston. Everything that happened there was also borne out of individual selfishness:

• Laghari selfishly left to Gugg for the prospects of more money and because he didn’t get along with Jamieson and his inner circle, selfishly taking a handful of juniors with him in the process instead of building his own team.
• Trauber overplayed his hand and selfishly got crossed with Fraser early in her tenue, and when she pulled a blackmail wildcard he selfishly concocted a self-serving retirement storyline and negotiated a way to preserve his stock (I’m sure she nonetheless relished in the fact that she branded him with a black mark on his U5 so he’d never work for another bank ever again).
• Dixon selfishly and lazily promoted “the next man up” (Jamieson) to Trauber’s role instead of launching a formal search for a replacement, even though the former was (and frankly continues to be) entirely unproven in anything other than midstream, let alone anything beyond oil and gas.
• Jamieson selfishly installed his inner circle goons throughout important roles for protection and self-preservation, not because they were the right people for the roles. That included Sauer and Schlopy as Heads of Energy, the former a universally disliked personality with zero talent for the industry and the latter a washed up limp biscuit knife-and-fork-only coverage officer with nothing to offer clients between the ears.
• Jamieson selfishly took Fernandez out of the picture, the last remaining competent senior on the O&G side after Laghari’s departure and a personality who juniors gravitated to because of his deep knowledge, work ethic, and client network (read: huge threat to Jamieson’s talentless inner circle goons).

Everyone points to losing Trauber as the melting point but to me it’s the combination of Tony and Mo that the guy the Houston office misses the most. They were both culture carriers that made the banking grind enjoyable every now and then. Fine, Mo left for more money and we’re a mighty bulge bracket with a balance sheet that can do the bulk of the business development in the absence of rainmakers. But in Tony we also lost our quality control. Our work product was simply superior when he was here (as evidenced by the Gugg guys plagiarizing it as soon as they got there, not to mention stealing our mandates with our own work), and as good as the team he left here is, it’s sadly rudderless and their work is uninspiring. Beyond the work product, he had the stones to keep our coverage team honest and that instilled credibility within the ranks. On the BD front, we are a laughing stock and don’t get invited to pitches anymore. In fact we learn about most deals by reading the same press releases that you read. That includes midstream deals, a particularly laughable statement considering we are overweight on midstream "studs” (as they call themselves). On a resource allocation front, the coverage bankers have lost the check-and-balance that he provided so now we burn treasured resources on garbage projects and we all know it. All of this has had team morale at a consistent low since his departure, and although management has recently acknowledged the void his departure created by replacing him with THREE directors to piecemeal his role, we are all very dubious that they will measure up to him. So much for “simplifying the management structure”.

Finally, the “woke” label is absolutely relevant and one of the posters here proves the point. To me, “wokeism” is a disingenuine or fraudulent show of concern for social and political issues, especially racism. By inundating their social media accounts with examples of Citi’s “activism” and quotes from minority middle management employees when in reality “all but one of their business heads are white men”, they embody the very definition of wokeness in a most manipulative and evil of ways. Further, the number of discriminatory infractions at the local level – whether documented or anecdotal – are frankly alarming and would be easily uncovered by any competent HR group...assuming they actually valued protecting employees more than protecting the woke smokescreen.

In conclusion, the Houston office self-destructed because individuals made selfish decisions and Fraser the politician selfishly watched it all unfold instead of intervening with an ounce of leadership. Yet as her passive role in allowing Houston to self-destruct showcases her calculatedly political astuteness, it also exposes her selfish ambitions and the nefarious lengths which she is willing to go through in order to achieve her political aspirations. Nothing she does is in the best interest of shareholders or of employees. Everything she does has a selfish and preservationist ulterior motive.

Remember that next time you think the stock is a value play.