Citicorp announced to its employees a management reorganization of its Worldwide Securities Services unit, which has lost ground in recent years in the cut-throat custody market.
The reorganization will replace a regional sales and marketing structure with one based on product lines.
Citi has appointed worldwide heads of sales, marketing, and relationship management for each of the unit's 21 product lines, which include global custody, clearing, and trust services.
Citi also aims to revamp technology -- by creating common systems to replace multiple, disparate systems, and by consolidating some processing -- in order to create products with consistent features.
Citicorp is the world's largest global custodian, with $600 billion assets under management and $250 billion in cross-border assets. In recent years, however, it has been seen as less focused than rivals such as State Street Boston Corp. and Northern Trust Corp.
Because Citi has always been organized along geographical lines, rather than product lines, the bank has been unable to provide the same level of service in all the 47 countries where it offers custody and clearing services.
In addition, it has had difficulty making winning bids for the worldwide business of potential customers, because operations in one or more countries may hold out for higher fees.
Citi also has multiple, incompatible computer systems in many countries, giving it higher unit costs than some of its competitors.
Steven Baker, division executive in charge of Worldwide Securities Services, said he did not anticipate any layoffs in connection with the reorganization.
"When I got into the position six months ago, I said we would spend six months in identifying the various issues confronting us around the world and look at where we've done a less than perfect job," Mr. Baker said.
He said the bank would not quit any product lines.
The bank is investing "tens of millions" of dollars this year to upgrade systems overseas, Mr. Baker said.
Citicorp is also centralizing much of its processing and marketing from offices in 47 countries to four regional processing centers. About 2,000 people work in those country offices.
"Organizing with worldwide product managers is a natural evolution of Citi's client-focused orientation and would held it leverage its proprietary custodian network into a clear strategic advantage," said Harold C. McIntyre, a consultant and president of Summit Group, Murray Hill, N.J.
No Changes Planned on U.S. Side
The reorganization will primarily affect Citicorp's overseas operations; the domestic trust and custody organization will be left intact.
In domestic trust and custody, Citicorp also has had difficulties, stemming mostly from management turnover several years ago.
This summer, the State of Florida moved all its business and American Telephone and Telegraph Co. moved part of its business away from Citi to other master trust institutions.
The State of Florida had generated some $5 million annually for Citicorp in fees, according to industry sources.
Aiming to Boost Market Share
Mr. Baker said that new technology in the master trust and custody area would held Citi gain market share.
"With the additional functionality we're building and improved customer service, I think we're going to take an increasing share of that business over time."
Citicorp is installing a $80 million trust and custody system from International Business Machines Corp. and Financial Technologies International to handle master trust and custody.
The bank plans to move the first customers to the new system in the beginning of 1994.
