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Citi Shutters Muni Proprietary-Trading Desk Amid a Wave of Departures

  • Bank slips to fifth place among US muni underwriters
  • More than two dozen bankers, traders, salespeople depart
Citigroup offices in New York.

Citigroup offices in New York.

Photographer: Victor J. Blue/Bloomberg

Citigroup Inc.’s municipal-bond business, for decades a powerhouse in the $4 trillion market for US state and city debt, has seen a wave of high-profile departures as the bank revamps parts of the group’s trading and banking units.

The bank in recent months shuttered its muni proprietary trading unit -- which used the firm’s own cash to trade and invest -- as part of a push to focus on providing more of its balance sheet to larger, institutional clients, according to people familiar with the matter. Citigroup offered buyouts to more than a dozen senior traders, bankers and salespeople, spurring further departures across the group as rivals moved quickly to poach talent.