Quiver Quantitative - Citigroup (C) municipal banking department is facing a period of significant uncertainty, with a notable departure of a team of health-care bankers to Jefferies (JEF). Amidst executive deliberations at Citi on the potential closure of the municipal bond division, about ten bankers, including seasoned managing directors Brian Carlstead, Ben Klemz, and Katherine Meyers, have decided to exit. The move comes as Citigroup, once a leading force in the underwriting of state and local debt, has witnessed a substantial outflow of talent in the municipal dealmaking sphere since 2022, correlating with a decline in its ranking within the industry.
This exodus signifies not only a personal career shift for the bankers involved but also highlights the shifting landscapes within the financial institutions that once dominated this niche market. The shift is particularly noteworthy as Citigroup ponders the future of its muni bond business, a segment it has been historically well-reputed in. Currently, Citigroup has slipped to seventh in the league tables for municipal management, a stark contrast to its previous No. 2 position the year prior, based on Bloomberg's compiled data.
On the flip side, Jefferies is on an upward trajectory within the municipal bond market, climbing to the fifth position as an underwriter of long-term municipal bonds in 2023. The bank's market share has seen a notable increase, which may be further bolstered by the new team of experienced bankers from Citi. This strategic recruitment could enhance Jefferies' capabilities and profile in health-care banking and the broader municipal bond market.
The departures and potential department closure at Citi are reflective of the broader changes and re-evaluations taking place in the finance industry, as institutions reassess their positions and offerings in response to market demands and internal strategies. The outcome of these movements will shape the competitive dynamics of municipal underwriting and could signal new directions for both Citigroup and Jefferies in the coming years.
This article was originally published on Quiver Quantitative