Citi EXITING ANOTHER market - distressed debt
Three months ago I flagged the severity of Fraser’s restructuring and I was blasted down by Citi employees talking about how it was likely going to be very small in the grand scheme of things and I was grossly overestimating the loss of jobs…
Three months later she’s decided to close two entire areas of the business and show’s absolutely zero signs of stopping with 100’s of jobs now lost. I know this restructuring was long overdue but can we finally acknowledge that this is actually a serious overhaul with dozens of desks in the firm in jeopardy.
Citi needs to take a look for another CEO.
if said shiti employees didn't have the common sense to forecast the severity of things then maybe some of those layoffs are somewhat deserved.
What desks are next?
If we’re following the trend my guess would be desks that deal in niche products. Fraser is probably asking the question of “are we the dominant player here?” and if the answer is no and the product is niche (i.e. requiring specific skilled employees) then they’re probably going to end up on the chopping block.
CMBS?
so why they closed the muni business if they were leaders in this line?
Texas (one of the biggest issuers of muni bonds) has this weird law where if a financial firm refuses to do business with gun owners and oil producers (something like that, don't know 100% of the details of the law), then a bank can't underwrite its munis. Citi wouldn't loan to certain gun producers (again, not 100% sure, but something like that), so Citi's public finance team could not do any business in Texas. This, I would think, significantly hurt revenue, which led to them getting the axe.
makes sense
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