Citi Cuts Half of Mortgage Securities Trading Staff
Gold, Jacqueline S., American Banker
Making good on a promise to scale back Wall Street-type businesses, Citicorp said Wednesday that it would eliminate 100 jobs in its mortgage securities area.
The move follows a severe downturn in collateralized mortgage obligations. The market peaked at $570 billion of issuances in 1993 and is expected to be half that big this year, according to Junaid Rubbani, managing director and head of capital markets at Citicorp.
The job cuts affect people in sales, trading, and underwriting of collateralized mortgage obligations at Citicorp Securities Inc., New York. The cuts will eliminate more than half of Citi's mortgage securities trading staff.
Citicorp will try to find jobs for those laid off elsewhere in the company, said spokeswoman Amy Dates.
Though the cuts will reduce Citicorp Securities' mortgage and fixed- income group by 33%, Mr. Rubbani said they do not presage further reduction of the capital markets staff, which has 900 members.
Cit has decided to focus on "areas where we can see an adequate return on our equity capital," he said. "We're trying to pick areas where we can make long-term investments." '
However, he added, "there are always unexpected turns in the market, and you just have to adjust to them."
The cutbacks followed statements by Citicorp chairman John Reed about the $260 billion-asset bank's priorities. He told banking analysts in February that Citicorp would emphasize international consumer banking and credit cards, which have yielded most of its profits, and would be pickier in choosing corporate and wholesale businesses. …