US-based multinational investment banking and financial service provider Citigroup Inc recently made an announcement revealing its plans to merge two of its Forex related business operations into one single business operation. The banking giant announced that the decision to merge two units was agreed upon post its recent enterprise-wide review owing to a series of consumer scandals and as some of its business ventures failed to meet expected targets.
As per the announcement, the forex division, local markets, and G10 currency business units will be merged and will function as a single integrated department. The banking service provider hopes that this move of restructuring its business will make it easier for cross-selling of their products while bolstering the group’s risk management process at the same time.
As per data, Citigroup is the fifth largest currency trading firm in the global market as per market share coming after firms like JP Morgan and UBS. As per an internal memo of Citigroup published by Reuters recently, the co-heads of the market division were quoted commenting to their staff that, “We believe this more streamlined operating model will drive better client service, risk management, and profitability”. Despite the integration of various business units into a single department and similarities in the respective unit’s product offerings, the operating units will retain their current branding and offerings in the real world while sharing their technological resources. As part of this restructuring plan, the group’s banks will separate its G10 rates finance team from the newly merged forex business unit.
But, the G10 business operations from both banks and restructured forex unit will operate under the same unit leader which is a newly created post. The group is yet to make an announcement on who will head this unit. Two notable factors among various reasons for restructuring include the group’s FX prime brokerage unit losing nearly $180 million on loans to Asian hedge funds and the group’s institutional client business failing to meet annual targets in 2018. Citigroup has greatly enhanced its FX offerings this year post joining UBS AG to launch electronic currency trading and pricing platform in Singapore- one of Asia’s biggest FX hubs. The product offerings from this joint venture are expected to go live by the end of 2019 and is said to support 23 spot currencies, including all currencies from the G10 group.
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