Citigroup's natural gas and power trading operations are to remain in Houston following completion of a reorganization intended to bolster the struggling banking giant, which has been rocked by the Wall Street crisis.
The trading unit will be part of Citicorp, one of two units to be formed in the reorganization. Citigroup's restructuring creates:
A smaller oil trading unit, called Phibro, is to be combined with gas and power trading, a spokesperson said. "Our commodities business is a highly valued business and unquestionably fits into our core activities," the spokesperson told NGI. Currently, there are about 250 front and back office employees in the Houston trading operation.
Citicorp will focus on leveraging the competitive advantages of the company's global universal bank in more than 100 countries, the company said. Citi Holdings will be a group of noncore businesses that include long-term businesses with strong market positions. However, they do not sufficiently enhance the capabilities of Citi's core business, and in many ways compete for its resources, the company said.
"Given the economic and market environment, we have decided to accelerate the implementation of our strategy to focus on our core businesses," said CEO Vikram Pandit. "This will help in our ongoing efforts to reduce our balance sheet and simplify our organization, which will enable us to better serve our clients and customers in both businesses without disruption."
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