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Capital markets: Citi equities team emerges from rehab

Tough medicine has been doled out at Citi since the arrival of Derek Bandeen as head of global equities trading last summer. After a blunt diagnosis of the problem – too many people doing the wrong things – the global equities division went through a dramatic shake-up in which it shed just over a quarter of its staff.

As part of the restructuring, the US bank also began a push in emerging markets equities at the start of the year. This business had been underperforming fixed income in regions such as central and eastern Europe, the Middle East and Africa.

Although Citi was number one for fixed-income in the CEEMEA region with about a 30% share of the market in 2008, the bank tended to rank in sixth to ninth place in equities, according to Farhang Mehregani, Citi’s head of CEEMEA equities.

Mehregani, Citi’s former head of trading risk for global equities, was handed the task of restructuring the CEEMEA equities business last July as part of Bandeen’s overhaul of global equities.

The first stage was deep cuts, largely in the third and fourth quarters of 2008. The overall headcount in global equities dropped by 27% from 2,200 people in 2007 to 1,600 by the end of 2008.