The combined entity will operate under the name of Citi Private Bank, while Smith Barney will disappear as a business unit in Hong Kong and Singapore. CitiÆs wealth management businesses in Australia and India will be unaffected by the reorganisation, the bank said.
The closure refers only to the Smith Barney brokerage business that is part of the bank's wealth management arm. Citi will continue to offer brokerage services to its market and banking clients as well as its institutional clients in Taiwan.
Citi said the move is prompted by clientsÆ demands for ôa more holistic and comprehensive platform to meet their wealth management aspirationsö. The new unit will have one common strategy, one organisation and one leadership structure aside from the common brand. However, the move also comes as Citi is struggling to cut costs across its business lines after suffering massive subprime-related losses.
The bank posted a net loss of $9.8 billion in the fourth quarter alone, following pre-tax write-downs of $18.1 billion related to its direct exposures to fixed-income markets and another $4.1 billion of credit cost increases due to losses on consumer loans.
Citi has cut about 6,200 jobs worldwide since July, according to a Bloomberg report yesterday which put the total job losses at Wall StreetÆs major banks at 34,000 over this period. Citi tops the list ahead of Lehman Brothers with 4,990 lost jobs and Bank of America with 3,650, the newswire said.
The Australian Financial Review also reported last week that Citi is talks to sell Citi Smith Barney Australia, its retail brokerage business, to National Bank of Australia. A Citi spokesman declined to comment on that report.
The Smith Barney brokerage unit in Taiwan employs about 50 people, while the brokerage and private banking units in Hong Kong and Singapore have close to 200 staff.
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