Citi is reported to be considering selling Phibro, its commodities unit that would see it raise hundreds of millions of dollars. It has been in contact with several investors who might be interested in commodities trading, including Warren Buffett. The problem is, it has been one of the firm’s cash cows contributing about $2bn in its bottomline within the last five years. There is no imminent deal to date and the death of the plan is still a big possibility. Some see this move as a way to deflect attention to the $100m bonus that was to be paid to Andrew Hall, a star trader for the firm.
Yesterday, there was also news of the firm’s plan to outsource some of its investment services. Part of its wealth management business, the firm’s wealthy clients might see themselves dealing with independent financial advisors, away from the 550 brokers they have been in contact with at Citi. This move marks the separation of its brokerage and banking businesses.