Citi Splits Consumer Banking and Credit Cards Units
Citigroup said Monday it was creating regional banking units as well as global credit card and consumer banking organizations, as the financial services giant seeks to become more nimble.
The reorganization is the first major structural move for Vikram Pandit, who was named as chief executive of Citigroup in December.
He replaced Charles Prince, who left in November under pressure from shareholders frustrated by the bank's performance.
"Our new organizational model marks a further important step along the path we are pursuing to make Citi a simpler, leaner and more efficient organization," Pandit said in a statement.
In January, Citi announced plans to raise $14.5 billion, slash its dividend and cut 4,200 jobs to shore up its balance sheet after a write-down for mortgages led to a $9.83 billion quarterly loss.
David Hilder, a research analyst with Bear Stearns, said the reorganization represented "a good example of positive change that can result from a re-examination of businesses and management structure." With the aim of bringing decision making closer to customers, Citi is creating regional units, each headed by a chief executive.
The regional CEOs will report directly to Pandit and will be given more leeway to make decisions, the company said.
Asia Pacific will be led by Ajay Banga; William Mills will head Western Europe, Middle East and Africa; Shirish Apte will oversee the Central and Eastern European region and Manuel Medina Mora will continue to lead Mexico and Latin America, Citi said.
Citi also reorganized its consumer group into global consumer banking and credit-card businesses.
Teresa Dial, 58, credited with reviving Lloyd's TSB Group Plc's British retail banking operations, has been appointed chief executive of Citi's consumer banking operations in North America.
She will also be global head of consumer strategy.
Steven Freiberg will be CEO of Global Cards, which combines Citi's U.S.
and international credit-card businesses, the company said.
Citi shares, which have fallen about 60 percent over the last 12 months, were off 1 percent at $20.59 in morning trading on the New York Stock Exchange.
plans to split its consumer banking unit from its credit-card business as part of a broader reorganization to cut costs and simplify the large financial institution's structure, the company said Monday.
Citi said named Teresa Dial, 58, global head of consumer strategy and chief executive of consumer banking in North America. That business will now operate separately from its U.S. credit-card lending operations, which the bank folded into a global cards unit, led by Steven Freiberg.
The moves come as CEO Vikram Pandit puts his imprimatur on the bank, which he took over after Charles Prince was forced out amid massive write-downs on mortgage-linked securities.
Many analysts expect the credit crisis to spread to consumer lending, which would put the credit card business in danger of major write-downs.
Citi also said it will set up geographical regions led by regional CEOs as the bank targets faster-growing regions outside of the slumping United States.
Ajay Banga will head the Asia Pacific region. William Mills is in charge of Western Europe, Middle East and Africa. Shirish Apte will run the Central and Eastern Europe region. Manuel Mora will handle Mexico and Latin America.
"The new organizational structure will allow Citi to focus its resources toward growth in emerging and developed markets," the company said in a statement.