Citi Group, the US-based multinational banking giant, has been seeing a flurry of changes in its high-level management and leadership team. Having just announced several changes to its leadership team earlier this week, which saw three of its executives promoted to a new role, Citi Group revealed that it is parting ways with yet another long-standing member of its family.
According to the latest update from the firm, Jason Cohen who has been serving at the firm for the last 11 years based out of the firm’s London office in the role of Head of Euro Swaps is parting ways with the firm as the US lender goes ahead with its restructuring plans. In order to brace with Brexit fallout and to ensure smooth operation while retaining its top-level executives, the US lender planned to relocate 63 jobs out of London and reassign them elsewhere in some leading European branches.
However, Mr. Jason Cohen, who has been serving as Head of Euro Swaps, has decided to resign from the firm rather than move to a different location as part of the permanent relocation program. While the report Citi Group is a pre-eminent figure in FX and OTC derivatives in the current global marketplace and hence its derivative products are used by investors from across the globe to hedge their portfolios. However, the ongoing Brexit crisis has got investors from across the globe worried and concerned that pending Brexit will cause huge disruption in the cross border derivatives market resulting in this particular business unit come under severe duress. The UK is currently a major hub for Citi group’s business across Europe. Owing to passporting rules currently in place in the country, the group is using its London office as a clearinghouse.
The group handles trades worth nearly 440 Billion EURO via its various clearinghouse offices located in the UK, primarily catering to clients from the rest of EU member nations while offering the service free of cost. However, a lack of Brexit deal would mean a passporting deal is likely out of place and hence the group is looking into several locations in the EU to relocate their staff and aims to retain as many executives as possible during the relocation program.
Alongside Citi Group, rumors in circulation and various reports in online news media and tabloids suggest that France is being considered as a favoured spot for relocation by many tier 1 banking service providers. However, the statement released by Citi group suggests that US lender is also considering relocation of its staff and business operations to offices in Frankfurt and Dublin.
Earlier this year, BOE asked banks and other financial institutions to submit their Brexit plans and prepare for all possible outcome including hard Brexit and this has caused quite a frenzy in the financial service industry in the UK with reports suggesting UK finance sector is likely to see nearly 250,000 job cuts if hard Brexit becomes a reality. This is one of the major reasons which has caused top banking service providers to initiate restructuring activity in their UK and European branches.