More than 1,000 British jobs are under threat at Citigroup as the American bank announced it would cut 20,000 staff worldwide.
Citi, one of the biggest banks in the world, set out plans for a major job-cutting plan after posting its worst quarter in 15 years.
The bank reported a quarterly loss of $1.8 billion in the three months to the end December on the back of a costly withdrawal from Russia, the devaluation of the Argentinian peso and expenses associated with the depositor lifeboat scheme after the collapse last year of Silicon Valley Bank (SVB).
Jane Fraser, Citi’s chief executive, called it a “very disappointing” quarter, but added that she was pleased with progress on simplifying the business and executing on strategy.
Citi employs 239,000 people worldwide, including 16,000 in the UK. Of those, 11,500 are in London, 4,000 in Belfast, 400 in Edinburgh and 100 in Jersey. The job losses are pencilled in for the next two years and follow the loss of 13,000 roles over the past six months.
The UK is the bank’s second biggest country for operations after the US. If it shoulders a proportionate share of the proposed job cuts, about 1,300 roles could go. Sources cautioned against a direct read-across, however.
In the quarter, Citi reported a poor performance from its fixed income operations, offset by “decent” results in equities. Investment banking revenue continued to be weak while the wealth management division “isn’t where it needs to be”, Fraser said.
Provisions for expected defaults on loans were $1.99 billion in the quarter, up by 69 per cent.
Like other banks, Citi is being called upon to support the Federal Deposit Insurance Corporation after the failure of SVB and Signature Bank last year. It set aside $1.7 billion for this.
The wind-down from Russia cost $500 million while devaluation of the peso cost $880 million. The restructuring and simplifying of the bank cost $70 million in the quarter.
For the full 2023 year, Citi reported net income of $9.2 billion, down from $14.8 billion in 2022.
Fraser, who is British and previously worked at Goldman Sachs and McKinsey, first signalled heavy job losses in September when she launched a wide-ranging plan to reduce bureaucracy within the bank. At the time she conceded the project would make some staff “very uncomfortable”. It later emerged that she planned to trim five layers of management, from thirteen to eight.
“Given how far we are down the path of our simplification … 2024 will be a turning point as we’ll be able to completely focus on the performance of our five businesses and our transformation,” she said on Friday.
Citi was once America’s biggest bank but was badly holed during the banking crisis after taking on huge exposure to subprime mortgages. It received billions in bail-out investment from the US government.
