Citigroup Inc plans to combine its foreign exchange & local markets and G10 currencies units under one integrated department. The US bank said today it is restructuring its FX business and combining their operations to make it easier to cross-sell products and bolster the group’s risk management.
Citi is the fifth-largest currency trading firm by market share last year, after the likes of JPMorgan and UBS.
“We believe this more streamlined operating model will drive better client service, risk management and profitability,” the co-heads of the markets division told their staffers in an internal memo seen by Reuters.
The two merged operations will retain their current branding and offerings though they already have similar product suits and share sales and technology resources.
2020 Global Market Outlook: How the “Known Unknowns” Can Affect CurrenciesGo to article >>
As part of the plans, the bank will also separate its G10 Rates Finance team from the new merged rates and currencies business, but both will operate under a new unit leader who it has not yet named.
Citi expands FX offering into Asia
Citigroup has made changes as it conducts an enterprise-wide review in the wake of a series of consumer scandals. Citi’s FX prime brokerage unit has come under fire after staring down losses of as much as $180 million on loans to an Asian hedge fund. The unit was reportedly pulled from the currency trading division and put instead under the oversight of the lender’s prime finance and securities services unit
The restructuring is also the first major change after James Forese, CEO of institutional client’s business, retired in April after the division fell short of some annual targets in 2018. He was succeeded by Paco Ybarra who now leads the unit that delivers half of Citi’s revenues and more than two-thirds of profits.
Citigroup has enhanced its FX offering this year, most recently joining UBS AG to launch an electronic currency trading and pricing platform in Singapore, Asia’s biggest foreign exchange hub. The new facility, which is slated to go live by the end of 2019, will support 23 spot currencies, including all those in the G10 group.
Singapore is the fourth forex trading engine location for Citi, which also has systems set up in Tokyo, New York, and London.