Citigroup reorganization to be completed in first quarter, cost $1 billion
By Tatiana Bautzer and Niket Nishant
(Reuters) -Citigroup Chief Financial Officer Mark Mason said on Wednesday the bank's largest reorganization in decades will cost about $1 billion for charges related to restructuring.
The overhaul is expected to be fully completed by the end of the first quarter next year, Mason told the Goldman Sachs U.S. Financial Services Conference. The changes include slimming down management and potentially laying off thousands of employees.
Simplifying the bank's structure will enable it to reduce annual expenses to $51 billion to $53 billion, he added, helping Citi to approach its profit targets.
The bank maintained its estimate for 2023 expenses at $54 billion, excluding a special assessment from the Federal Deposit Insurance Corp. of about $1.65 billion.
Some of the restructuring charges of about $200 million will probably be booked in the fourth quarter, according to Mason.
The bank aims to reach a medium-term return on average tangible common shareholders equity of 11% to 12% in the medium term after the reorganization. ROTCE is a measure of company performance.
Citi's full-year revenue in 2023 will probably come in at about $78 billion, the lower end of its previous forecast, Mason said.
Mason cited Argentina as a factor reducing Citi's revenue.
«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.»
REORGANIZATION
Citi announced the latest phase of its sweeping reorganization last month, trimming leadership and moving executives within divisions. The bank is reducing management layers from 13 to eight as part of its biggest
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