Citi's real issue now is its disgruntled US investment banking MDs
As we reported earlier today, there's said to be some disgruntlement at Citi. Key people in the wealth management division have received retention bonuses, and some middle and back office staff there might be facing demotion.
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These may, however, not be the most acute sources of dissatisfaction at the US bank. There is also the small issue of the US investment banking team.
Citi's US investment bankers are some of its best. In the first nine months of 2024, they generated $1.7bn of revenues in the Americas, according to information provider Dealogic. By comparison, Citi's European investment bankers generated $754m of revenues over the same period.
As such, Citi's US investment bankers have been used to having a big seat at the big table. Tyler Dickson, the bank's US based ex-global head of investment banking was the US-based banking co-head with Manolo Falco from 2018, and then Citi's sole global head from 2023.
However, Dickson left in July this year after allegedly competing with Vis Raghavan for the role of global head of banking. Raghavan got the job and joined from JPMorgan. Dickson left for Blackstone instead.
Since arriving in early June, Raghavan has shaken up Citi's investment bank in a way that seems to undermine its incumbent US bankers. Achintya Mangla has been hired from JPMorgan as head of financing. Jens Welter has been moved from London to run North American coverage, despite having European experience. US bankers will have to report into him.
How do Citi's US bankers feel about this? Not happy seems to be the answer. There are complaints about external hires on large guarantees, and one Citi insider says colleagues are weighing whether to stick around given the increased politics.
"The real question now for Citi bankers in the US is whether they stay," says one MD. "A lot of senior people are asking themselves this question as we go into bonus season."
The decision reached by Citi's US bankers will depend in part upon whether Raghavan, Mangla and Welter decide to pay the Dickson-loyalists fair bonuses, or whether they intentionally underpay them in the hope that Dickson's people walk away. It also depends upon who gets made the global head of M&A. At the moment, that role has gone to New York-based Kevin Cox, but only on an interim basis. Unconfirmed and possibly spurious rumours have it that this job will be handed to another of Raghavan's JPMorgan favourites - Madhu Namburi - JPMorgan's head of technology banking, in the New Year.
Photo by Stephanie LeBlanc on Unsplash
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