Citigroup, the largest U.S. bank, on Tuesday overhauled the structure of its investment bank, combining equity and debt capital markets activities.
The changes come as Vikram Pandit, who took over investment banking last month following a management overhaul, puts his stamp on a unit suffering billions of dollars of mortgage, leveraged loan and trading losses. Last week, it said it may this quarter write down up to $11 billion for subprime mortgage losses alone.
Chad Leat and Mark Watson, who had been co-heads of global credit markets, will no longer have senior leadership roles as part of the changes, which were announced Tuesday in an internal memo from James Forese, co-chief executive of markets and banking. Citigroup confirmed the memo's contents.
Citigroup joins several other Wall Street banks to combine equity and debt markets operations, allowing clients to be offered more services at once, and avoiding the need for separately managed and often competing teams of bankers.
It was not immediately clear whether jobs will be eliminated as part of the changes. Citigroup did not immediately return a request for comment.
The combined capital markets unit will be known as capital markets origination and be led by Tyler Dickson, who has been head of equity capital markets. Dickson will report Forese.
Citigroup is also creating an investor client group combining sales and client management functions in equities, fixed income, currencies and commodities. Antonio Cacorino and Jim O'Donnell will lead the group, and report to Forese.
Leat will assume a senior role advising clients, oversee the leveraged finance pipeline, and assist Dickson on transitional issues. Watson will also assist on transitional issues before taking a new job at the company.
The changes "will more closely align our origination and sales functions across traditional product categories," Forese said in the memo.
Citigroup shares closed Monday at $33.57 on the New York Stock Exchange. They began the year at $55.70.