As per sources, Citigroup has decided that it will close its global distressed debt group. As a part of CEO Jane Fraser’s overhaul, the bank is basically exiting Wall Street businesses with poor returns. The project is internally named as Project Bora Bora.
The bank is exiting businesses with poor returns so as to strengthen its odds to hit the performance targets set by CEO Jane Fraser. In September, Fraser announced the latest overhaul of Citigroup by assets. As a result, the third-largest bank in the United States has taken many steps to trim executives and cut back businesses.
According to CNBC,
“Last week, the bank announced it was closing its municipal-bond trading operations, a once-thriving business with about 100 employees that had fallen on hard times. The distressed-debt group, which trades the bonds and other securities of companies in or approaching bankruptcy, employs about 40 people, said the people, who declined to be identified, speaking about strategic moves.”
Basically, the bank is under a big reorganization, where it is making leadership changes as well as job cuts. Hence, the bank is making its biggest overhaul in two decades. The CEO of the bank is trying to bring the business under more control and ensure the structure of the bank is simple.
However, the officials of the bank did not comment when asked about it.
Last week, Citigroup said that it is considering closing its municipal bond trading and underwritings and other market-making activities. According to experts, the move will ensure the elimination of one of the major players in the distressed debt markets.