Citigroup restructures residential mortgage business
Citigroup Inc, the largest US bank by assets, is planning to integrate its various mortgage businesses - from originations to securitizations - according to a memo to Citi employees.
By Agencies |
NEW YORK: Citigroup Inc, the largest US bank by assets, is planning to integrate its various mortgage businesses - from originations to securitizations - according to a memo to Citi employees.
The aim in combining the bank's mortgage businesses is to improve consistency and risk management, the memo said. Citi Mortgage had previously been separate from the loan operations in Citi's markets and banking unit.
Citi is often criticized by investors and industry analysts alike for being too sprawling to operate effectively. Furthermore, the bank - like many of its peers - did not have sufficient risk management tactics in place to hedge against the mortgage and credit crisis that erupted over the summer.
Bad bets on mortgages have led to billions of dollars in losses in the bank's portfolio.
Vikram Pandit, when he became chief executive in mid-December, said he would do a thorough review of all of Citigroup's businesses.
Bill Beckmann, the president of Citi Mortgage, was put in charge of creating the new "end-to-end" business, the memo said. Beckmann will continue to report to Carl Levinson, head of Citi's US Consumer Lending Group, and will now also report to Jamie Forese, co-CEO of Markets & Banking.
The memo said that mortgage origination activities of CitiFinancial, Citibank and Smith Barney branches will remain separate from the new structure, which is still in the works.
Citigroup fell 90 cents, or 3.2 per cent, to $27.36, alongside most other financial stocks in the market yesterday.
The aim in combining the bank's mortgage businesses is to improve consistency and risk management, the memo said. Citi Mortgage had previously been separate from the loan operations in Citi's markets and banking unit.
Citi is often criticized by investors and industry analysts alike for being too sprawling to operate effectively. Furthermore, the bank - like many of its peers - did not have sufficient risk management tactics in place to hedge against the mortgage and credit crisis that erupted over the summer.
Bad bets on mortgages have led to billions of dollars in losses in the bank's portfolio.
Vikram Pandit, when he became chief executive in mid-December, said he would do a thorough review of all of Citigroup's businesses.
Bill Beckmann, the president of Citi Mortgage, was put in charge of creating the new "end-to-end" business, the memo said. Beckmann will continue to report to Carl Levinson, head of Citi's US Consumer Lending Group, and will now also report to Jamie Forese, co-CEO of Markets & Banking.
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The memo said that mortgage origination activities of CitiFinancial, Citibank and Smith Barney branches will remain separate from the new structure, which is still in the works.
Citigroup fell 90 cents, or 3.2 per cent, to $27.36, alongside most other financial stocks in the market yesterday.
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