Citi's exodus under its shiny new leader looks like a warning to Vis Raghavan
Jane Fraser, CEO of Citigroup, likes Andy Sieg. She regularly praises him during the bank's investor calls and notes his importance to reshaping the bank's wealth management business, where costs still consumed 85% of revenues in the second quarter.
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However, while Sieg gets to work, right-sizing the wealth team and dispensing with the excessive numbers of people that EY says Citi has working on non-client related processes as a result of its inadequate technology, people that Sieg might have wanted to keep are leaving. Vis Raghavan, the new head of Citi's investment bank, may want to take heed.
Business Insider reports that Citi has lost 17 bankers to Bank of Montreal (BMO), and that they've gone from a team Sieg describes as "the clear market leader - full stop." The 16 bankers worked for Citi's law firm group, which deals with wealthy lawyers. The exits, which include very senior and junior staff, represent 10% of people in the group. Sieg probably didn't want them to go.
Why did they leave? It might have something to do with the departure of Mehrnaz “Naz” Vahid, who spent 38 years at Citi and who had run the leading law firm group since 2009. Vahid announced she was leaving two months ago and said she would miss her team. The feeling is likely mutual.
It may also, though, have something to with staff changes Sieg made in the wake of Vahid's exit. With Vahid gone, Sieg promoted Kristen Bitterly into her role. Bitterly is a former head of capital markets for the Americas, who's worked for Citi since 2008. However, Sieg then hired Keith Glenfield, with whom he worked at Merrill Lynch until September 2023, to fill Bitterly's seat as head of investment solutions. Glenfield joins Citi in September.
Hiring from a former employer is always fraught, but it's especially fraught when jobs have been cut. Even before the latest departure of 17 bankers, Sieg's wealth management unit had lost 24 senior people - voluntarily and otherwise. There have been complaints about Fraser's decision to hire senior figures like Sieg externally instead of promoting from within; now it seems that those senior outsiders are cutting incumbents and hiring people of their own.
All of this should probably be watched closely by Raghavan, who was also hired externally (from JPMorgan) by Jane Fraser and who may also have a penchant for bringing in his own people. Raghavan started work last month and his arrival has already prompted the exit of Tyler Dickson, Citi's head of investment banking.
Sources at Citi say Raghavan may have a harder time making headway at the bank than he had at JPMorgan, where the platform and franchise were stronger. Veteran colleagues of Dickson, like John Chirico, Douglas Adams, and Phil Drury might be expected to follow their leader out the Citi door. At the same time, Raghavan has the remains of a clique of now semi-disempowered, semi-client facing long serving Spanish Citi bankers to contend with. The strong temptation may be to ruffle feathers and hire old friends, but no one wants to see 10% of staff in market leading teams walk out the door as a result.
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