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Life on the London trading floor at Citigroup
The epicentre of the investment bank is, of course, still the trading floor. This is the battleground where traders and salesmen and women return every day armed only with strong coffee, the Financial Times and the latest batch of analyst notes, to pit their skill and intellect against the capricious nemesis that are the financial markets – and hopefully win.
Just at Citigroup’s London HQ, you will find more than 1,000 of these men and women working for the bank’s EMEA Markets and Securities Services (MSS) division which includes rates, commodities, credit, FX, equities, and investor services. All of the heads of division sit in London, except for credit, who based in New York.
They sit across two expansive floors, with FX and rate traders and salespeople on one floor and credit and equities sitting cheek-to-cheek on the other. They work only for the bank’s institutional client base. Citigroup never had a proprietary trading desk in the same way as some of the other investment banks and so the commodity desk is less affected by the Volcker Rule than other banks.
The boss of the division is Leonardo “call me Leo” Arduini, a Citigroup veteran who took over the role in March 2014 after being promoted from his previous position as head of EMEA investor sales. He has been with the bank for 21 years, covering many trading, sales and management roles.
He became head of markets in Italy in 2010 and since then his career has been on the rise, clearly proving his salt in a challenging period. It certainly hasn’t gotten easier since he took the helm of EMEA Markets with heightened volatility in most financial markets, a result of geopolitical and economic uncertainty for the best part of 2015.
In the bank’s third quarter until the end of September, Citigroup’s Markets division suffered an overall year-on-year 5% dip in revenue, with fixed income dragging on performance, down 16% to $2.6 billion from $3.06 billion in the same period in 2014.
In addition, there has been the delicate matter of a global regulatory investigation into widespread foreign exchange rate manipulation, which Citigroup has been cooperating with.
But challenging environments have become the new normal for banks and time will tell if Mr Arduini is up to the job to steer the US bank’s key EMEA trading operations in the right direction.
A tour of Citigroup’s trading floors proves slightly disappointing for your correspondent, but not unexpected. No excitable and cryptic hand signals to execute a trade and no adrenaline-fuelled shouts of “buy” and “sell”.
There are lots of screens with fast-moving red and green lines, but traders go about their business quietly and the only sounds are the low hum of the air conditioner and snippets of conversation.
For a long time, the business of trading most markets – with the exception of the commodities exchange in Chicago – has not been a spectator sport, but there is an intense energy on these floors and the sense that there is a lot riding on the minute-by-minute actions of the people that work here.
“The trading floor is not like it was 20 years ago, and with less liquidity because of a number of factors such as higher capital requirements, it is also much more difficult for a bank to make money,” says one insider. “Citigroup is in good shape because it has been hugely slimmed down after the crisis, but hasn’t pulled out of any markets or geographies as our