Citigroup launched a major restructuring of 2 of its top moneymaking units in sales and trading. We got the internal memo.

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Michael Corbat, chief executive officer of Citigroup Inc., listens during a House Financial Services Committee hearing on April 10, 2019 in Washington, DC. Seven CEOs of the country's largest banks were called to testify a decade after the global financial crisis.

• Citigroup is merging its rates and currencies operations, two of its top moneymakers in sales and trading.
• As part of the changes, Nadir Mahmud, who ran the firm's foreign exchange and local markets business, is taking on a new role in strategy for the EMEA region.
• The bank sent an internal memo Monday announcing the restructuring, a copy of which was seen by Business Insider. Read the full memo below.
• Click here for more BI Prime stories.

Citigroup is launching a major restructuring of two of its top sales and trading businesses within fixed income, currencies, and commodities.

The firm sent out an internal memo Monday announcing it was merging its rates and currencies operations, two of the top moneymakers in the firm's $11.6 billion FICC division, in a move first reported by The Financial Times.

Nadir Mahmud, who ran the firm's foreign exchange and local markets (FXLM) business, is taking on a new role in strategy for the EMEA region, according to the memo, which was confirmed by a company spokesman.

This was the first major shakeup since Paco Ybarra took over as head of the investment bank following the announcement in April of Jamie Forese's retirement.

"We have decided to integrate FXLM and G10 Rates by creating a single Rates and Currencies business line. Our two existing businesses have a neighbouring product set, share corporate sales, structuring and a significant technology stack," Carey Lathrop and Andy Morton, who took over the markets division after Ybarra was promoted, wrote in the internal memo. "We believe this more streamlined operating model will drive better client service, risk management and profitability.

Citigroup is the second-ranked FICC business on Wall Street after JPMorgan Chase, according to industry consultant Coalition. It ranks first in emerging market macro trading, second in G10 FX, and third in G10 rates.

FICC revenues largely declined across Wall Street in 2018, and 2019 has been a struggle thus far as well. Executives at Citi and Morgan Stanley warned last week that second-quarter trading revenues were likely to take a hit.

Read the full memo, which details the new reporting structure within rates and currencies, below:

To:
Markets and Securities Services, ICG Management, Mike Verdeschi

From:
Carey Lathrop and Andy Morton

Date:
June 17, 2019

Re:
Organizational Announcement


We have decided to integrate FXLM and G10 Rates by creating a single Rates and Currencies business line. Our two existing businesses have a neighbouring product set, share corporate sales, structuring and a significant technology stack. We believe this more streamlined operating model will drive better client service, risk management and profitability.

We want to thank Nadir Mahmud for managing our leading FXLM franchise over the last five years. He will continue to report to us; assisting in this transition and then working with Leo Arduini on EMEA strategy, including optimizing the legal entity and booking model structure.

Within Rates and Currencies, we will broadly align activity along these two dimensions, with the following management structure:

• • Itay Tuchman will continue to run Foreign Exchange, reporting to us.
  • Deirdre Dunn and Pedro Goldbaum will co-run Rates, reporting to us. Deirdre will move out of the NAM Markets Head role and we will begin the process to select her replacement.
  • Current G10 Rates and Local Rates trading desk heads will report to Deirdre and Pedro in addition to their existing regional reporting lines.
  • Local Markets and G10 Markets Treasury will combine into a single unit, led by Andy Thursfield, with Ulises Garciga reporting to him. Andy will report to us and Mike Verdeschi.
  • Flavio Figueiredo will head Rates and Currencies Corporate Sales, reporting to us and Andres Recoder. This new pillar will enable us to optimize our coverage model, align with our partners in BCMA and will be beneficial to our joint venture with TTS.
  • Regional corporate sales and structuring heads Eduardo Miszputen and Carlos Xirau (APAC and LATAM FXLM respectively), John Chun and Mark Mathieson (NAM and EMEA G10 Rates CSG respectively) will each take on a reporting line to Flavio.
  • Product Investor sales teams will report as follows:

Brian Mccappin (head of FXLM Investor sales) will report to Itay, Deirdre, Pedro and Jim O'Donnell.

Serge Pomonti, Mike Saraceni and Ben Travers (APAC & Japan, NAM and EMEA heads of G10 Rates Investor Sales respectively) will report to Deirdre, Pedro and the corresponding regional sales head.

• • Lionel Durix will continue to head Rates and Currencies Structuring, reporting to Itay, Deirdre and Pedro.
  • Jose Luis Yepez will head APAC Rates and Currencies trading reporting to Itay, Deirdre and Pedro and locally to Stu Staley.

Other direct reports of Nadir will transition to reporting lines to be determined over the coming weeks. We would like to thank Pankaj Vaish for his commitment to the Local Rates franchise over the last few years.

The current G10 Rates Finance desk will be outside the scope of Rates and Currencies. We will be sending a separate communication describing that construct in the next couple of weeks.

We wish all our colleagues here the best of success in their new roles, as we work together to extend Citi's lead over the competition in the Rates and Currencies domain.