Citigroup closes municipal underwriting and market-making unit, memo reveals

Citigroup has determined to shut its municipal underwriting and market-making actions, in accordance with a memo seen by Reuters.

“The economics of these activities are no longer viable given our commitment to increase the firm’s overall returns,” stated the memo, signed by Citigroup’s head of markets Andy Morton and Peter Babej, interim head of banking.

The memo added that the financial institution will unwind the unit within the first quarter and that most individuals working there’ll go away. Discussions about the way forward for the unit led to a crew of bankers leaving for Jefferies final month.

Bloomberg reported the memo earlier on Thursday.

Citi’s municipal providing enterprise has been below scrutiny from the Texas legal professional common, who in January halted the financial institution’s capability to underwrite most municipal bond choices in Texas, saying the financial institution had discriminated towards the firearms sector.