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The $1 Billion Citigroup Re-organisation Will Be Finished In The First Quarter Of 2024

The $1 Billion Citigroup Re-organisation Will Be Finished In The First Quarter Of 2024
Mark Mason, Chief Financial Officer of Citigroup, stated on Wednesday that restructuring and severance costs associated with the bank's biggest reorganisation in decades will total approximately $1 billion.
Mason stated at the Goldman Sachs U.S. Financial Services Conference that the redesign should be finished completely by the end of the first quarter of the following year. Reorganising the management team and possibly terminating thousands of workers are among the adjustments.
He continued, saying that by streamlining the bank's organisational structure, it will be able to cut yearly costs to between $51 billion and $53 billion, which will assist Citi in hitting its profit goals.
With the exception of a special assessment of roughly $1.65 billion from the Federal Deposit Insurance Corp., the bank kept its forecast for 2023 spending at $54 billion.
Mason estimates that a portion of the $200 million in restructuring expenses would likely be recorded in the fourth quarter.
After the reorganisation, the bank hopes to achieve a medium-term return on average of 11% to 12% on tangible common shareholders' equity. ROTCE serves as a gauge for business performance.
Mason predicted that Citi's 2023 full-year revenue would likely be at the lower end of its previous estimate, or roughly $78 billion.
Mason mentioned that Citi's revenue was being affected by Argentina.
"The Argentina elections for example, that is going to put pressure on revenue for a couple of hundred million dollars," he said. "Thinking about the currency impact, that's the cost of us doing business there."
Last month, Citi revealed the most recent stage of its extensive restructuring, which included reassigning executives and cutting back on leadership across departments. As part of its largest reform in decades, the bank is cutting the number of managerial levels from thirteen to eight.
CEO Jane Fraser wants to enhance the company's stock, which is underperforming its competitors, while cutting red tape and raising profitability. During a third quarter results call in October, Fraser informed analysts, "We need to change how we run Citi in order to truly transform it once and for all."
Due to increased trading revenue, investment banking fees, and interest payments, the third-largest U.S. bank by assets exceeded forecasts for third-quarter profits.

Christopher J. Mitchell

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