Professional services provider JTC announced on Monday that it will acquire Citigroup’s (C) global fiduciary and trust administration services unit, Citi Trust, for $80 million. Citi Trust manages over $70 billion in assets for over 2,000 ultra-high-net-worth clients across seven locations, including New York, Delaware, Singapore, and Switzerland.
Citi Trust Sale Reflects Bank’s Strategy to Streamline Operations
The acquisition is expected to expand JTC’s presence in the U.S. and will add over 420 employees across eight cities. Citi had first disclosed its plans to sell the unit earlier this year. This sale is part of the banking giant’s CEO Jane Fraser’s strategy to streamline operations, reduce costs, and boost the bank’s performance, following similar divestments in recent years.
Citi’s COO Stripped of Data Compliance Responsibility
Meanwhile, Citi stripped its COO, Anand Selva, of his responsibility for heading the data compliance team after the bank was fined $136 million earlier this year for “insufficient progress” in fixing data management issues. Selva will lose responsibility for about 800 employees, and his responsibility for data compliance will be shared with Tim Ryan. Ryan is Citi’s new CTO, who joined in June this year.
This marks the third time in three years that Citi has reassigned the task of overseeing the bank’s data problems. This decision was made following a series of meetings between CEO Jane Fraser and its executives, aiming to expedite the overhaul of the bank. Selva will remain responsible for improving Citi’s risk controls and will continue to lead the bank’s back-office operations. However, this shift was made as Selva was seen as stretched too thin.
Is Citigroup a Buy or Sell?
Analysts remain cautiously optimistic about Citigroup stock, with a Moderate Buy consensus rating based on 11 Buys and seven Holds. Over the past year, Citi has surged by more than 40%, and the average Citigroup price target of $70.97 implies an upside potential of 21.7% from current levels.
