NEW YORK (Reuters) - Citigroup Inc, the largest U.S. bank, plans to hire an outsider to take over its flagging U.S. consumer business, the Wall Street Journal said on Friday.
Terri Dial, who runs Lloyds TSB Group Plc’s U.K. retail banking business, will replace Steven Freiberg at the helm of U.S. consumer operations, the newspaper said, citing people familiar with the matter.
Dial will become 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 newspaper said. Freiberg, who used to run the bank’s North American credit card business, would take over the card business worldwide.
The changes are the latest under Vikram Pandit, who replaced Charles Prince as chief executive in December. Pandit has been doing a top-to-bottom review of Citigroup to find ways to boost earnings and revenue, cut costs and help rejuvenate a stock price that has slid by more than half in the last year.
Separately, Citigroup is likely to announce a shuffling of the bank’s structure, the newspaper said.
Citigroup plans to create Asia and Europe divisions, consisting of consumer and corporate banking operations in the respective regions, the newspaper said. Ajay Banga, who runs international consumer operations, would lead the Asia unit, but it is unclear who would lead the Europe unit, it said.
Pandit has also named new risk management chiefs, and installed former Morgan Stanley colleague John Havens to run daily operations in the securities unit, which includes investment banking, trading and alternative investments.
The newspaper said some bank executives consider the distinction between whether the bank is organized geographically or by business line superficial.
But the bank 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.
Its U.S. consumer business, meanwhile, lost $432 million in the fourth quarter, and its full-year profit fell 51 percent to $4.11 billion.
Citigroup has in the last five months 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 and JPMorgan Chase & Co.
The bank has shed more than 6,000 jobs this year, and more cuts are widely expected, including in the investment bank.
This week, Citigroup said it replaced Ali Hackett and Tom Tesauro, the co-heads of global equity finance and prime brokerage, according to a memo on The New York Times’ DealBook blog. Nick Roe, who has been running the European part of that business, will replace them, the memo said.
Citigroup spokesmen Jonathan Woodier in London and Richard Tesvich in Hong Kong declined comment. Several other Citigroup spokespeople did not immediately return calls seeking comment. Another spokesman confirmed the memo’s contents in a published report. Lloyds did not answer calls seeking comment.
Before joining Lloyds, Dial worked at Wells Fargo & Co 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 closed Thursday at $21.79. They closed last March 28 at $50.96.
Reporting by Jonathan Stempel; Editing by Kim Coghill and David Cowell