Citigroup Inc., the third-largest U.S. bank, plans to hire as many as 20 senior corporate and investment bankers in Europe in the first-half of 2011 as it rebuilds a team weakened by departures.
The lender will add managing directors and executive directors in London as well as bankers in Russia, Turkey and the Middle East, Manuel Falco and James Bardrick, Citigroup’s joint heads of banking in Europe, the Middle East and Africa, said in an interview. The New York-based firm has about 1,000 investment and corporate bankers in Europe, the Middle East and Africa.
“We are clearly looking for talent,” Falco, 46, said in the interview at the firm’s Canary Wharf office in London. “We are going to hire a lot more in countries and regions where activity is likely to grow quickly, including Russia, Turkey and the Middle East.”
Citigroup, overseen by Vikram Pandit, 54, is overhauling its investment bank after revenue at the division declined and it suffered a series of departures over the past two years. James Forese, co-head of global markets, became chief executive officer of securities and banking last month. The bank, which received a $45 billion taxpayer rescue in late 2008 when it nearly collapsed, repaid the last of its bailout last year.
“Our balance sheet has been recapitalized, and we are in a position to deploy capital to our core clients to support their businesses and growth,” said Bardrick, 48. The “banking business is now in the best position it’s been in for years.”
The firm is among three working on this year’s $10 billion initial public offering of Switzerland’s Glencore International AG, the world’s largest commodities trader, people familiar with the matter said last month. Tom Reid and Auke Leenstra are leading Citigroup’s team on the IPO. Citigroup also advised General Electric Co. on its $2.8 billion purchase of the well-support unit of the U.K.’s John Wood Group Plc yesterday.
Citigroup “had two or more difficult years that have caused it to lose league table positions across the board,” said Philip Keevil, partner at Compass Advisers LLC and a former head of European mergers at Citigroup. “It has also experienced a great deal of turnover in corporate finance and corporate banking.”
The departures started in 2009 in Europe when Barclays Capital hired Citigroup executives in London, including Thomas King, head of banking for Europe, Middle East and Africa, as well as mergers bankers Matthew Ponsonby and Jim Peterkin. Automotives banker Reid Marsh and financial institutions banker Thomas Demeure were also among those leaving in 2010. Julian Mylchreest, former co-head of the energy banking team, moved to Bank of America Corp. in July.
Citigroup, which was the second-placed adviser on European mergers in 2009, fell to sixth in 2010, according to data compiled by Bloomberg. It trailed its U.S. competitors Morgan Stanley, Goldman Sachs Group Inc. and JPMorgan Chase & Co.
In the fourth quarter, the bank rose to eighth in M&A rankings, from 12th in the previous three months, helped by its role in advising Russian telecommunications provider VimpelCom Ltd. on its purchase of Wind Telecomunicazioni SpA in October. The firm is also advising on sales of government state assets in Turkey, including gas provider Istanbul Gaz Dagitim AS.
“There is strong evidence that the tide is turning,” said Keevil. “Citigroup remains strong in syndicated lending, which is critical in this credit-sensitive environment. It’s made some good decisions in promoting the right people and stabilizing the ship.”
The firm has started replacing senior bankers across some industries in Europe. It hired former UBS AG adviser Steve Conway to head its team advising private equity firms. Former HSBC Holdings Plc banker Charles-Henri Filippi also joined as chairman of Citigroup’s French unit in November.
The bank is also planning to expand in Russia, which it acknowledges may be costly.
“Russia is one of the hottest markets in the world in terms of cost,” said Citigroup’s Falco. “If you want to hire and if you want to hire a top quality managing director, that’s going to cost you, so you need to make sure that an enlarged team can really deliver for clients.”
Hiring in cities such as Moscow could cost securities firms $1.8 million to $3 million for a sales trader at the managing director level, according to Jason Kennedy, chief executive officer of Kennedy Group, a London-based recruiter. That compares to about $1.3 million to $2 million in London, he said.
Transactions involving companies from the so-called BRIC countries -- Brazil, Russia, India and China -- climbed almost 80 percent last year and accounted for a record 22 percent of the $2.23 trillion of global takeovers, according to data compiled by Bloomberg. Acquirers from BRIC nations announced $402 billion of takeovers, up 74 percent from 2009 and more than quadruple the level of five years ago, the data show.