It's Citi's investor day, and the bank is outlining its strategy under its newish CEO, Jane Fraser. Despite suggestions that Citi no longer wants to compete in the very top tier of investment banks, it's been doing some big hiring.
Citi says it hired 70 managing directors last year, of whom 40 were in the North American market. Twenty five were in four sectors: technology, healthcare, fintech and private equity (financial sponsor coverage). The bank says financial sponsors drive around 30% of its investment banking revenues.
In the same presentation, Citi says it's shifted its banker footprint to "high growth sectors" where it's underrepresented (tech, healthcare and fintech), suggesting further hiring may be on the cards for 2022. The bank has also created the following 'super groups' to take account of shifting categories of client.
Hiring is also possible in related areas. Citi says there's significant opportunity for growth in areas like leveraged finance, private debt and securitization.
As we've reported recently, junior bankers at Citi have been complaining about what they say are disappointing bonuses. The Financial Times reported last month that Fraser had decided that Citi no longer wants to be a top ranking player in investment banking and sales and trading, and some internally attributed their feeble payments to this. However, in her presentation today, Fraser says that both markets and banking are among Citi's five key "pillars", alongside services, global wealth management and personal banking. In markets, Fraser says Citi wants to continue to grow in equities.
However, it's not all about the front office. In the same presentation, Fraser says Citi is prioritizing "risk and controls and safety and soundness", hiring "top talent" in risk and data, and automating controls. Despite hiring MDs, it's also imposing a flatter management structure. CFO Mark Mason, says the bank now has 4,000 non-technical staff working on consent orders relating to its control failures in 2019. As we reported earlier this week, the bank has been engaged in some dramatic recruitment for its compliance and control functions.
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