Dive Brief:
- Citi is closing its distressed-debt business, CNBC and Bloomberg reported Wednesday, citing sources familiar with the matter.
- The unit trades the bonds and securities of firms in or nearing bankruptcy and employs about 40 people, CNBC reported. Citi’s decision to exit the space will affect 20 positions, according to Bloomberg.
- While Citi’s distressed-debt business outperformed in 2021, growth slowed significantly in the following two years, sources told Bloomberg. Citi declined Banking Dive’s request for comment.
Dive Insight:
The distressed-debt unit would be the latest to get the ax as part of Citi CEO Jane Fraser’s firmwide restructuring aimed at curbing costs at the New York City-based bank.
The move comes roughly a week after Citi chose to wind down its municipal business by the end of March.
The bank told employees in a memo last week that the muni business is “no longer viable given our commitment to increase the firm’s overall returns.”
As part of the firm’s wide-scale restructuring, Citi has weeded out excess layers of management and consolidated roles whose efforts duplicate one another.
The exits come as Citi last month laid off more than 300 senior managers. Cuts connected to the municipal wind-down could total roughly 100 employees, Bloomberg reported last week.
Two years ahead of the restructuring, Fraser launched an effort to exit more than a dozen foreign retail markets across the globe.
