Citi Cuts Staff as Profits Rise
Multiple news organizations are reporting that Citigroup is cutting 200 to 300 positions from equity and fixed income trading groups even as the bank reported favorable net income results for the first quarter of this year.
For Q1 2014, the bank’s net income was up four percent to $3.9 billion, or $1.23 per diluted share, on revenues of $20.1 billion, according to Citigroup. Last year, the bank reported a net income of $3.8 billion, or $1.23 per diluted share, on revenues of $20.2 billion for the first quarter of 2013.
Despite the uptick in profits, the bank is intent upon cutting costs and the job losses in trading will shrink the bank’s global work force by about 2 percent, according to a report in the Wall Street Journal. In fact, the WSJ is reporting that layoffs will affect Steve Prince, a brother of Charles Prince, the former CEO of Citi.
“Despite a quarter that was difficult for our company, we delivered strong results. Both our consumer and institutional businesses performed well and we grew both loans and deposits while holding the line on our expenses,” says Michael Corbat, CEO of Citi in remarks about the financial results. “$4 billion in net income helped generate $6 billion in regulatory capital during the quarter and increased our estimated Tier 1 Common ratio to 10.4% on a Basel III basis.”
Corbat says that the bank is “engaged with the Fed to better understand their expectations regarding the CCAR [Comprehensive Capital Analysis and Review] process,” referring to the bank’s recent failure to pass the Federal Reserve’s stress test.
The annual CCAR exercise by the Federal Reserve is intended to “ensure that institutions have robust, forward-looking capital planning processes that account for their unique risks, “ according to Fed officials. The stress test is an attempt to guarantee that banks have sufficient capital to continue operations during economic downturns and financial stress.
“We are committed to bringing our capital planning process to the highest possible standards, befitting an institution of our global reach,” Corbat says. “I will dedicate whatever resources and make whatever changes necessary to achieve this critical goal.”
Citi officials were unavailable for comment by deadline.
Jill Considine Named to LCH.Clearnet Board
Jill Considine, board chair of LCH.Clearnet
LCH.Clearnet Group has named Jill Considine, the former chair and CEO of the DTCC, to its board of directors.
Considine, who will join the board on April 25, also will serve as board chair of LCH.Clearnet LLC, the Group’s US-based entity.
From 1999 until 2008, Considine served as chair and CEO of the DTCC, and its subsidiaries. From 2009 until 2011, Considine was one of three trustees of the AIG Credit Facility Trust, serving until the terms of the trust were fulfilled by AIG. She was also president of the New York Clearing House Association L.L.C., from 1993 to 1998.
Her other posts include service as the New York State Superintendent of Banks (1985 to 1991), and a six-year term as a member of the board of the Federal Reserve Bank of New York, where she was chair of the Audit and Operational Risk committee.
“Our growing business in the US reflects part of the group’s long-term strategy, and I look forward to working with Jill as we continue to expand our operations in this market,” Jacques Aigrain, who remains chairman of LCH.Clearnet Group, says in a statement.
She currently serves on the boards of the Interpublic Group of Companies (and is the former chair of the compensation committee), Mizuho Securities, USA and InfraHedge, Ltd.
As a member of the Council on Foreign Relations and the Economics Club of New York, she also served on the Group of Thirty steering committee on global clearance and settlement.
BNP Paribas Securities Services Fills Top Post
BNP Paribas Securities Services, a global custodian that has more than $8 trillion in assets under custody, has made two new senior appointments.
José Placido, global head of sales and relationship management, BNP Paribas
José Placido will join the executive committee of BNP Paribas Securities Services on April, 22, 2014, and will become global head of sales and relationship management, effective January 1, 2015.
Until the new year, Placido will co-head sales and relationship management with Charles Cock, current head of client development. During this period, he will focus on strategic sales planning, with the heads of the global client segments reporting to him, according to a BNP Paribas statement.
At the beginning of 2015, the current head of client development and a senior member of BNP Paribas Securities Services executive committee, will become vice-chairman – international, a
Charles Cock, co-head sales and relationship management, BNP Paribas Securities Services
new senior client executive role focused on key customer relationships.
He joined the group in 1995, when Paribas bought the JP Morgan European clearing and custody network. Since then, he has been in charge of sales and relationship management.
Previously, Placido, who has more than 25 years of experience in the securities services industry, was CEO of RBC Dexia, a post he had held since 2006. Prior to that, he held other positions at RBC, including managing director of its UK office, becoming senior vice president of RBC Global Services in 2001 and executive vice president in 2003.
Rimes Names New President for French Office
Rimes, a provider of managed data services for the buy-side, has named Renaud Larzillière as the new president of its Paris-based French office.
Larzillière, who has been with the Paris office since its 2010 founding, most recently served as director general overseeing R&D, local sales and support functions throughout France.
Previously, he was head of research and development at Rimes, developing the company’s suite of managed data services. Prior to that, he was a senior project manager at SAP Business Objects and program manager at Thales Services.
Larzilliere will report to Christian Fauvelais, CEO, co-founder and director, Rimes.
The Larzilliere promotion comes at a time when French asset managers and buy-side firms around the world are increasingly adopting managed data services for the management and governance of index and benchmark data, the company’s statement also observes.
DTCC’s Avox Plans to Hire 200+ in Wales Office
Avox Ltd., a specialist in legal entity data services, reports that it intends to add more than 200 new employees over the next two years, doubling the size of its workforce at its company headquarters in Wales by the end of 2016.
The expansion will “support projected business growth and evolving client needs as the finance industry continues to increase focus on timely risk management and regulatory reporting,” according to a company statement.
Avox, a wholly owned subsidiary of the DTCC, validates and maintains legal entity reference data on behalf of major banks, asset managers, insurance companies and other financial institutions worldwide.
Avox helps firms comply with a series of new finance industry reporting requirements, including linking to the Legal Entity Identifier (LEI), a unified global identification system for companies across markets and jurisdictions, the company says.
The planned expansion “reflects both DTCC’s strong commitment to Avox and our plans to continue investing in and growing the business over the long term,” Michael C. Bodson, DTCC president and CEO, says in the statement.
U.K. Prime Minister David Cameron is quoted in the statement as well, saying that the Avox news is a “great vote of confidence in Wrexham [in Wales, where the headquarters is located] and shows that the U.K. is open for business.”
Tabb Group’s Sussman Moves to Liquidnet
Liquidnet, a global institutional trading network, has named Adam Sussman head of market structure and liquidity partnerships. He joins Liquidnet from market research firm Tabb Group, where most recently he was a partner and director of research.
Sussman will serve as a senior advisor on market structure issues providing insight and guidance on industry developments, technological trends, and financial industry dynamics to Liquidnet’s community of buy-side members and customers, according to a company statement. He will be based in New York, reporting to Liquidnet’s head of U.S. equities, Brennan Warble.
Prior to his work at Tabb, Sussman served as a senior product manager responsible for order management systems, routing and next-generation trading tools focused on the equities and options markets at Ameritrade, Inc., a brokerage industry subsidiary of Ameritrade Holding Corp.
Eze Castle Integration Promotes for UK Ops Post
Eze Castle Integration (ECI), a provider of private cloud services for the alternative investment industry, has promoted Dean Hill to the position of executive director, overseeing ECI’s United Kingdom operations and international sales efforts.
In addition, the company reports that its London work force has moved into a new office. The reason for the move: ECI has outgrown its previous office on Marylebone Lane, the company says, calling its new location in London’s Mayfair a “more efficient layout that enables effective collaboration across client service and technology teams and will support the company’s continued growth.”
ECI’s Hill is moving up from director of sales, EMEA, to the position of executive director, UK, the company notes, adding that he will “continue business development oversight for the company’s UK and Asia offices while assuming responsibility for Eze Castle’s UK operations.”
In addition to the London office and its headquarters office in Boston, ECI has offices in Chicago, Dallas, Hong Kong, London, Los Angeles, Minneapolis, New York, San Francisco, Singapore and Stamford, Conn. The company provides solutions and services to more than 650 alternative investment firms worldwide, including more than 100 firms with $1 billion or more in assets under management.
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