Citigroup (NYSE:C) is considering a major restructuring under the leadership of CEO Jane Fraser after almost 15 years’ time. As per a report by the Financial Times, the investment banking giant may divide its Institutional Clients Group (ICG) into three separate units. These units would cover investment and corporate banking, global markets, and transaction services.
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It is worth mentioning that the ICG unit is responsible for more than 50% of Citigroup’s total revenues. If this restructuring takes place, the newly created units are expected to be overseen by their current leaders, who would report directly to Fraser.
The overhaul appears to be in response to the departure plans of Paco Ybarra, the current head of ICG, announced earlier this month. Citigroup has not yet named a replacement for Ybarra, and he is expected to remain in his role until mid-2024.
Apart from the ICG breakup, Citigroup is in the midst of restructuring its consumer banking operations, which include personal banking and wealth management offerings. As part of the changes, the company is creating a separate unit for the wealth management business. Thus, following these restructuring initiatives, the company is expected to report its financial results for a total of five segments.
What is the Forecast for C Stock?
The streamlining of operations and the exit from the consumer banking business in 14 markets are expected to improve Citigroup’s focus on its core business. Nevertheless, analysts are cautiously optimistic about the stock, likely awaiting the impact of these efforts on the company’s performance and outlook.
Citigroup has a Moderate Buy consensus rating based on seven Buys, 10 Holds, and one Sell rating assigned in the past three months. Meanwhile, C stock’s average price target is $54, implying a 27.8% upside potential. So far in 2023, the stock is down about 2%.
Investors looking for the most accurate analyst covering C stock could follow analyst Betsy Graseck from Morgan Stanley. If one were to replicate Graseck’s trades on Citi and hold each position for one year, about 62% of the transactions would result in a profit,t with an average return of 10.54%.
