Citigroup plans to hire more than 500 bankers and traders over the next two years to strengthen its securities business and make up the ground lost to its rivals during the financial crisis.
As the US group continues to recover from its crisis-time woes, one of its main focuses will be to boost its investment banking and trading offerings to companies and investors around the world, according to people inside the company.
Citi’s securities business, a long-time Wall Street powerhouse, has fallen in the industry league tables in recent years as competitors such as JPMorgan Chase and Bank of America took advantage of the turmoil to make acquisitions and poach dealmakers.
Citi’s executives say the hiring push addresses weaknesses in the company’s ability to cover corporate and investor clients. The bank has made some high-profile hires, including Peter Orszag, the White House’s former budget director.
Critics say that the recruitment drive could push up expenses but Citi insiders maintain that targeted hires will not be a significant cost for a division that employs more than 24,000 people.
The plans are part of Citi’s strategy to put its troubled past behind it and harness its global presence and a large cash payment division that gives it access to companies and governments.
“The global genie is not going back in the bottle,” John Havens, Citi’s president, told the Financial Times. “As a bank we are in a position to serve our clients wherever they are and that is something not many of our competitors can say. Going global is not easy.”
Citi’s financial problems during the turmoil, which forced the US authorities to spend $45bn to bail it out, hit the securities business hard.
As bonuses were constrained by government shackles, bankers and traders departed, leaving gaps in client coverage. Citi’s ability to lend to companies – a key driver of investment banking business – was also reduced during the crisis.
So far this year, Citi lies in seventh place in the investment banking revenue league tables compiled by Dealogic, behind most of its rivals. In 2006, Citi came second.
“We are not in the top three in most products areas, which is where we want to be,” Mr Havens said. “But if you are asking: do you have the talent and the content to win clients? The answer is absolutely yes.”
In recent months, Citi’s securities business has notched up some successes, including being one of the underwriters on the listing of Glencore, the global commodities trader that is set to raise around $11 billion.
Citi also worked on the $4.4bn initial public offering by the US healthcare group HCA Holdings last month. In the takeover arena, Citi advised Lubrizol , the specially chemicals company, in its $9 billion sale to Warren Buffett’s Berkshire Hathaway and the Italian carmaker Fiat in its recent reorganization of its holdings in Chrysler.