Citigroup Chief Financial Officer Mark Mason said his firm will adjust headcount in its investment banking division as necessary as it continues to look for ways to boost profits.
For years, Citigroup has been beefing up its investment bank, including through hires in sectors like energy, biotechnology and health care, Mason said in an interview with Bloomberg Television. Still, the recent drought in deals has forced the firm to consider changing the pace of some of those investments, he said.
“What the environment we’re managing through does suggest is that we may have to repace in certain areas across the franchise in light of things slowing down, and we’ll do just that,” Mason said in response to a question about headcount in the investment bank. “We’ll recalibrate as needed.”
Earlier Wednesday, Mason told investors at an investor conference hosted by RBC Capital Markets that his firm was beginning to see “green shoots” in investment-grade debt markets. Still, he said revenue from the investment banking division is likely to drop in line with industrywide revenue, which is already down about 40% so far this quarter.
Citigroup Chief Executive Officer Jane Fraser has sought to improve profitability by focusing on businesses like treasury services and wealth management, which offer steadier revenue and higher returns than volatile operations like investment banking and trading. Mason reiterated earlier Wednesday that the company over the medium term is still hoping to lower its efficiency ratio — a measure of how much it costs to produce a dollar of revenue — below 60%.
“Our strategy has to be around how do we protect the competitive strengths and advantages we have in parts of the franchise and how do we shore up other areas so that collectively we’re delivering and executing on improved returns over time,” Mason said.
Mason’s presentation before investors was temporarily cut off after climate protesters interrupted the event. A webcast of the event was briefly shut off amid the incident and resumed shortly thereafter.
On her first day as CEO, Fraser pledged to reduce Citigroup’s planet-warming greenhouse gas emissions and this month established net-zero emissions targets for its lending to the automobile, commercial real estate, steel and thermal coal-mining industries after earlier pledges related to the energy and power sectors.
“We respect the activists’ right to protest and we want to hear their views and perspectives,” Mason said. “But these types of issues — the clean energy transition — is not something that happens overnight.”
— With assistance from Sonali Basak