January 8, 2008 / 7:28 PM / in 10 years

Citigroup combines some mortgage activities

2 Min Read

NEW YORK (Reuters) - Citigroup Inc, the largest U.S. bank, is creating a U.S. residential mortgage business combining origination, servicing and capital markets activities, according to an internal memo dated Tuesday.

The business is intended to streamline Citigroup's mortgage lending and securitization businesses, merging activities previously split between the consumer banking and corporate and investment banking units. Mortgage lending at Citibank, CitiFinancial and Smith Barney branches will not be changed.

Bill Beckmann, the president and chief operating officer of CitiMortgage Inc, will oversee the new business, according to the memo from Carl Levinson, head of U.S. consumer lending, and Jamie Forese, co-chief executive of markets and banking.

Beckmann will continue to report to Carl Levinson, and begin reporting to Forese, the memo said. He will also work closely with Jeff Perlowitz, who runs securitized markets.

A Citigroup spokesman confirmed the memo's contents. It was not clear how many jobs the reorganization might affect. None of the executives was available for further comment.

The move is one of the first under new Chief Executive Vikram Pandit, who took over on December 11. His predecessor, Charles Prince, stepped down five weeks earlier amid mounting mortgage-related losses and an inability to keep costs down.

Citigroup has said it may face an $11 billion fourth-quarter write-down tied to subprime mortgages, but several analysts have said that amount might grow.

CNBC television has said Pandit might also cut 5 percent to 10 percent of Citigroup's work force, on top of 17,000 job cuts announced last April, when the bank employed 327,000 people.

Shares of Citigroup were down 91 cents or 3.2 percent at $27.35 in afternoon trading. They earlier fell to $27.18, their lowest level since October 2002.

Reporting by Jonathan Stempel; Editing by Leslie Gevirtz and Gerald E. McCormick

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