Citicorp, which used to deploy bankers in multiple waves to bring back global corporate business, is consolidating into a single army.
As part of the "business directions" strategy filtering from chairman John S. Reed down through the ranks, Citibank is, among other changes, merging corporate banking functions that had been divided by geography and targeting top investors as clients in each country.
Within a 3,000-person unit called Global Markets, Citi's Global Corporate Banking business has pulled together three divisions that had previously operated independently: capital markets and trading; corporate finance; and cross-border finance.
"We have avoided all the redundancies, turf issues, and regional issues we had with three units operating in 90-odd countries," said Dipak Rastogi, an executive vice president who will oversee a portion of the new organization.
Under the old configuration, one set of professionals focused on emerging markets, another on developed countries. Clients worked with different business units according to whether they were debt issuers or investors.
This led to uncoordinated customer calls, missed cross-selling opportunities, and internal battles over resources, Citibank sources said.
The new structure, announced in April, unites the groups under a single corporate umbrella and has them reporting to executive vice presidents Robert McCormack and Dennis Martin.
According to one longtime Citi watcher, these managers "have their arms around each other's shoulders in a way that's unusual at Citibank"-meaning they cooperate and make team decisions. Both are reporting to Mr. Reed.
Bernell Wright, a former Citibank officer and now an independent consultant in New York, said Mr. Reed "is wresting power from what used to be a business-unit power base of the old fiefdoms (his predecessor) Walter Wriston put in place."
Whatever the motivation, the consequences are manifest in leadership changes throughout the bank, notably a consolidation of retail banking power under executive vice president William Campbell.
The unit overseen by Mr. McCormack and Mr. Martin will target the top 1,400 multinational companies, plus top-tier firms in emerging market countries, Citibank said. Its stated goals are to eliminate overlapping products and offer more service with less frustration.
Before the changes, "if you were a Brazilian company that decided it wanted to issue debt in the United States, you would have had two groups that had to work with each other from a product perspective to execute the transaction," said a Citibank spokeswoman.
Now a unified team would be responsible for the deal.
Two major factors influenced the decision to rearrange the department, Citibank said: emerging-market customers' need for capital from developed countries, and pressure among investors in the developed world to invest in higher-yield emerging-markets paper.
Lingering in the background were concerns that Citibank's competitors have gotten stronger and raised the level of competition in capital markets.
Citibank sources said management was influenced by watching Bankers Trust New York Corp.'s recently announced acquisition of Alex. Brown & Sons; J.P. Morgan & Co.'s apparent ambitions as a "bulge bracket" firm that takes equity positions; and Morgan Stanley Group's pending merger with Dean Witter Discover.
Citibank set ambitious targets-10% to 12% in earnings growth and return on equity in the mid-20s-that required a new organizational approach.
"You see various responses in the marketplace," said a Citibank source who spoke on condition of anonymity. "We are not saying we are going to go out and be everything to everybody. We're focused on a targeted group of investors who are interested in investing globally and in structured paper."
Charles Wendel, president of Financial Institutions Consulting in New York, said Citibank's corporate finance strategy has served it well, enabling it to attract top talent and placing it in the highest echelon of U.S. financial institutions with global operations.
"They have taken a more strategic focus on high-priority accounts, and within those high-priority customers they're trying to do more for them, to sell deeper," Mr. Wendel said.
In the management team may be clues to the New York bank's future direction.
Executive vice president Ernst W. Brutsche, 59, will oversee Global Markets until he retires in January. Previously head of trading and capital markets in developed countries, Mr. Brutsche is a German citizen who once led Citicorp's investment banking activities in Europe, the Middle East, and Africa.
He will be assisted by Alan S. MacDonald, executive vice president and co-head of Global Markets, previously head of corporate finance in developed markets. Mr. MacDonald, 54, joined Citicorp in 1974, working for a decade in Brazil before moving to New York for assignments in technology and investment banking.
The two other Global Markets co-heads are Mr. Rastogi, 42, a native of India and citizen of Canada who was named global head of the derivatives business in 1992; and Julian M. Simmonds, 46, a British citizen who joined Citicorp in 1972 and has held leadership positions in derivatives and foreign exchange.
With their overseas grounding, "These people haven't had time to make alliances internally," said Mr. Wright, president of Advanced Business Concepts. "Citibank is growing up. It's becoming a corporation as opposed to a series of fiefdoms."
PaineWebber analyst Lawrence W. Cohn was less impressed: "Citibank seems to have an institutional bias against stability. I just viewed this as another one of their interminable reorganizations."