Citigroup to name new U.S. consumer chief in shuffle

NEW YORK (Reuters) - Citigroup Inc (C.N) is hiring Terri Dial, credited with reviving Lloyds TSB Group Plc's U.K. retail banking operations, to take over its flagging U.S. consumer business, a person familiar with the matter said on Friday.

Dial will become Citigroup's global head of consumer strategy, but the 58-year-old California native's primary task will be to improve U.S. retail banking and consumer finance, the person said.

Lloyds shares dipped 2 percent in Friday trading in London on news of Dial's departure.

Citi Chief Executive Vikram Pandit is reviewing the bank top-to-bottom to improve profitability and rejuvenate a stock that has fallen more than 50 percent in the last year.

Retail banking is an important area for Citi. Its U.S. consumer business lost $432 million in the fourth quarter and its full-year profit fell 51 percent to $4.11 billion. In 2006, U.S. consumer businesses accounted for about a third of Citi's income.

Citigroup is likely to announce a shuffling of its retail and corporate banking structure, The Wall Street Journal reported.

Separately, Citigroup said it replaced Ali Hackett and Tom Tesauro, the co-heads of global equity finance and prime brokerage, according to a memo obtained by Reuters. Nick Roe, who had run the European part of that business, will replace them as head of global prime finance, reporting to hedge fund services chief Steve Bowman, who wrote the memo.

Dial is seen as having revived retail banking at Lloyds TSB, which she joined in 2005.

"Terri has delivered a creditable performance in challenging circumstances, broadly continuing the strategy of her predecessor, slashing costs and squeezing revenues out of customers until the pips squeak," James Eden, analyst at Exane BNP Paribas, in a research note.

Lloyds (LLOY.L) confirmed Dial was leaving, but did not say where she was going.

Dial will succeed Steven Freiberg at the helm of U.S. consumer operations. Freiberg, who used to run the bank's North American credit card business, will take over the card business worldwide.

RESTRUCTURING

As part of its overall restructuring efforts, Citigroup plans to create Asia and Europe divisions, consisting of consumer and corporate banking operations in the respective regions, the Wall Street Journal said. Ajay Banga, who runs international consumer operations, will lead the Asia unit, but it is unclear who will lead the Europe unit, it said.

So far this year, Citi has announced restructurings of its residential mortgage business, wealth management area, Japanese banking and brokerage units and risk management function.

Citigroup still must show it can grow amid expectations that losses will continue to mount from subprime mortgages, leveraged loans and deteriorating consumer credit.

The bank lost $9.83 billion in the fourth quarter, hurt by $18.1 billion of write-downs and credit losses tied to subprime mortgages. Many analysts expect a large first-quarter loss.

In the last five months Citigroup has raised some $30 billion of capital and slashed its dividend to preserve more, yet analysts have said years of underinvestment have left it in an uphill battle to compete effectively with rivals such as Bank of America Corp (BAC.N) and JPMorgan Chase & Co (JPM.N).

The bank has shed more than 6,000 jobs this year, and more cuts are widely expected, including in the investment bank.

Citigroup spokesmen Jonathan Woodier in London and Richard Tesvich in Hong Kong declined to comment.

Before joining Lloyds, Dial worked at Wells Fargo & Co (WFC.N) for nearly three decades, rising to become chief executive of its banking unit. She joined Lloyds' board in 2005 and also chairs the retail committee of the British Bankers' Association, according to her official biography.

Citigroup shares fell 96 cents to close at $20.83 on the New York Stock Exchange. A year ago, they closed at $50.96.

(Additional reporting by Saeed Azhar, Michael Flaherty and Steve Slater; Editing by David Cowell and John Wallace)