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Citigroup (C) to Conduct 35 LayOffs on London Trading Floor - Analyst Blog

Citigroup Inc. ( C ) is axing around 35 jobs in its capital markets trading operation in London, per a Reuters report. Notably, the recent layoffs included Valentin Marinov - head of Europe G-10 foreign-exchange strategy in London.

This move follows the bank's strategy of reducing costs, amid decreasing business transactions, stricter regulations, high litigation costs and rising popularity of electronic trading. Since the 2008 financial crisis, banks have been reducing highly-paid trading jobs to trim costs.

Concurrent with the third-quarter 2014 earnings release in October and in keeping with the streamlining of its international operations, Citigroup also announced "strategic actions." The company stated that it proposes to exit the consumer banking business in 11 markets. The global footprint will now cover 24 markets that represent more than 95% of Global Consumer Banking's (GCB) current revenues.

The 11 markets include Costa Rica, Czech Republic, Egypt, El Salvador, Guam, Guatemala, Hungary and Japan. Citigroup expects to significantly complete its strategic actions by the end of 2015. The move comes in line with the company's strategy to focus on markets where it has a strong presence and long-term growth prospects.

Recently, British and Swiss regulators probing into the foreign exchange market manipulation charged five major global banks including Citigroup, JPMorgan Chase & Co. ( JPM ), The Royal Bank of Scotland Group plc ( RBS ), HSBC Holdings plc ( HSBC ) and UBS AG with $3.4 billion, thereby increasing the legal burden for these banks. Manipulation of currency rates by major financial institutions triggered thorough investigations by regulatory bodies across Europe, Asia and America.

Notably, Citigroup will be paying $358 million to the UK's Financial Conduct Authority (FCA), $350 million to the Office of the US Comptroller of the Currency (OCC) and $310 million to the Commodity Futures Trading Commission (CFTC).

We believe the company is well positioned to resolve its internal inefficiencies and setbacks. Further, we believe these streamlining initiatives will bolster the company's capital position, reduce expenses and drive operational efficiencies.

Citigroup currently carries a Zacks Rank #3 (Hold).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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