Citigroup (C) to Sell Trust Business as Part of Overhaul Plan

Core Viewpoint - Citigroup Inc. is divesting its trust business as part of a broader restructuring strategy led by CEO Jane Fraser, aimed at enhancing operational efficiency and focusing on key business segments [1][3]. Group 1: Divestiture Details - The trust business, which manages trust and estate planning for ultra-wealthy clients, is being sold under the internal code name "Project Mango" [1]. - A buyer has been identified, but their identity remains confidential; a previous bid of $70 million was unsuccessful [1]. - The buyer will manage administration and fiduciary services, while Citigroup retains investment management functions [2]. Group 2: Transformation Strategy - Jane Fraser's transformation strategy includes a reorganization into five reportable operating segments, with direct reporting to the CEO, reducing management layers from 13 to 8 [3]. - The bank plans to eliminate 20,000 jobs in January 2024 as part of its restructuring efforts [3]. - The overhaul is driven by underperformance in profitability and stock market returns compared to competitors, as well as challenges with outdated technology [3]. Group 3: Strategic Divestitures - Citigroup has previously exited consumer banking in 14 markets across Asia and EMEA, closing sales in 10 markets, including Australia and India [4]. - These divestitures are intended to free up capital for investments in wealth management operations in key markets like Singapore and Hong Kong [4]. Group 4: Financial Performance - In Q2 2024, Citigroup reported a 3.6% increase in revenues, net of interest expenses, while operating expenses declined by 2% year over year [5]. - Citigroup's shares have increased by 7.6% over the past six months, compared to an industry growth of 11% [5]. Group 5: Industry Context - Other banks, such as Societe Generale and Barclays, are also engaging in divestitures to strengthen their capital positions and streamline operations [7].