Citigroup (NYSE:C) has decided to close its municipal underwriting and market-making activities, according to a memo seen by Reuters.
“The economics of these activities are no longer viable given our commitment to increase the firm’s overall returns,” said the memo, signed by Citigroup’s head of markets Andy Morton and Peter Babej, interim head of banking.
The memo added that the bank will unwind the unit in the first quarter and that most people working there will leave. Discussions about the future of the unit led to a team of bankers leaving for Jefferies last month.
Bloomberg reported the memo earlier on Thursday.
Citi’s municipal offering business has been under scrutiny from the Texas attorney general, who in January halted the bank’s ability to underwrite most municipal bond offerings in Texas, saying the bank had discriminated against the firearms sector.
C shares opened Friday lower by 65 cents, or 1.3%, to $49.59.
