Dive Brief:

• Citi is considering splitting its Institutional Clients Group into three segments — investment and corporate banking, global markets and transaction services, the Financial Times reported, citing people familiar with the proposal.
• Citi CEO Jane Fraser has discussed adding Andy Morton, the bank’s trading division chief, and Shahmir Khaliq, who leads treasury and trade solutions, to her executive management team, according to Bloomberg. Fraser also is reportedly considering moving Gonzalo Luchetti, who leads the bank’s U.S. personal-banking division.
• The thinking comes less than three weeks after Citi announced Paco Ybarra, its ICG chief, would leave the bank in the first half of next year.

Dive Insight:

If an ICG split happens, it wouldn’t be the first time a major Wall Street bank has spread out responsibility from two or three pillars to five. Wells Fargo in 2020, split its wholesale bank into a commercial unit and an investment bank that focuses on capital markets. The bank also divided its consumer bank into one unit focusing on branches and small businesses, and a separate arm centered on consumer lending. At the time, CEO Charlie Scharf said the change would provide more accountability across the bank.

Citi has delineated itself for more than a decade between ICG and its consumer-centric unit that includes retail banking, credit cards and wealth management. The bank had already been planning to separate wealth management from the consumer unit and hand responsibility to Andy Sieg, the former Merrill Lynch chief who is set to join Citi in October.

If ICG breaks up — a strategy the Financial Times’ sources emphasize is just one possibility under consideration — it could be seen as a way to diversify power, giving a broader voice to five executives instead of three. Rather than report to Ybarra, the unit chiefs would report directly to Fraser. That also could be viewed as a tightening of reins — Fraser could have more input in day-to-day operations — or a tightening of Citi’s belt: Fraser has previously indicated she may cut costs by removing a layer of upper management.

When it announced Ybarra’s upcoming departure, Citi did not name a replacement, and Fraser said no decision had been made on how the leadership of Ybarra’s unit would be structured. The Financial Times’ sources, however, said Citi is not actively looking for a replacement for Ybarra. The bank declined to comment to the Financial Times or Bloomberg.

Fraser said at last year’s investor day the bank intended to "make [its] organizational structure simpler,” according to Bloomberg. 

“It should not come as a surprise to you that becoming a flatter and a leaner organization is a priority for me,” Fraser said at the time.

ICG generated roughly three-quarters of Citi’s profit in 2022 — $10.7 billion of the $14.8 billion in net income the bank reported last year, according to Bloomberg. 

ICG brought in about $41 billion in revenue last year, the wire service reported. However, that figure may decline for 2023: The division’s revenue dipped 9% in the second quarter, compared with the same period in 2022, Citi reported last month. If ICG’s three pieces were to be broken out, though, transaction services would be up. Fraser highlighted 15% jumps in both treasury and trade solutions and securities services in the bank’s second-quarter earnings statement.

The ICG unit was forged in 2009.