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Citigroup Inc. is combining its stock trading business with its prime brokerage unit, which caters to hedge funds, private equity firms and other investors.

The New-York based bank will also lay off hundreds of equity and fixed-income traders globally in response to weak revenue trends, according to a Bloomberg report that cited sources familiar with the matter.

A Citi spokesman declined to comment on the reported layoffs.

The new unit, named Equities and Securities Services, will be co-led by Dan Keegan, Okan Pekin and Murray Roos. Keegan will also become head of markets and securities services for North America.

“As the industry continues to consolidate and margin pressures intensify, clients are looking for solutions that deliver best-in-class services,” co-heads of markets and securities services Carey Lathrop and Andy Morton wrote in an internal e-mail seen by Reuters.

“We believe that now is the time to create an integrated offering supporting the pre-trade, execution and post-trade requirements of our clients,” they wrote. The combined business will include broad trading and execution capabilities in addition to financing, hedging, clearing, and custody services, the memo said.

In its second-quarter results reported earlier this month, Citi’s trading revenue remained challenged for a third consecutive quarter, with fixed-income trading down 4 per cent, excluding a gain from Citi’s investment in Tradeweb, and equities revenue down 9 per cent.

Many other banks already have combined such units.

Citi’s markets and securities services division has been shaken up in recent months as the bank streamlines businesses to better serve the evolving needs to clients. Last month, Citi combined its Foreign Exchange & Local Markets and G10 currencies businesses into one unit.

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Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 29/05/24 11:21am EDT.

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