(Bloomberg) — Citigroup Inc. is building a new trading floor in Paris as the Wall Street giant prepares to nearly double its staff in the French city.
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The new floor in its existing building — located steps from the Avenue des Champs-Élysées and the Arc de Triomphe — will help Citigroup increase staffing for its trading division to 250 in the coming years, up from 130 currently, said Fabio Lisanti, head of the bank’s trading business across Europe, excluding the UK. The new floor is set to include at least 85 desks.
“It’s going to be a mixture of hiring and moves,” said Lisanti, who moved to Paris this month. “We will be bringing more traders here. The growth will come from trading and all the support functions around those — operations, legal, compliance — all the things that a trading floor needs.”
The expansion in Paris comes as Citigroup and rivals continue to grapple with life after Brexit, which forced Wall Street’s biggest banks to adjust operations to ensure they were trading European assets — from government bonds to interest rate products to equities — within the 27 countries that remain in the European Union.
“London remains the main trading hub for us,” Lisanti said. “But we have and will move certain risk management and risk books in Europe. We’ve already moved quite a few and there’s more to go.”
In Paris, Citigroup is trying out a new format. Gone are the endless rows of identical desks that Wall Street has long used for markets divisions. Instead, staffers are stationed at adjustable standing desks in circular pods meant to encourage traders and salespeople to talk and work together more.
A trio of foreign exchange traders claimed the best view on the current trading floor, with the Eiffel Tower peeking out above the leafy Faubourg-du-Roule neighborhood surrounding the bank’s offices. Lisanti himself prefers to take his meetings in the Place du Village — or the Village Square — where the bank has an eatery and set up a foosball table for traders to use when they’re looking to unwind.
“Whenever there’s an occasion, you always find that people offer sweets,” Lisanti said. “One of my colleagues, he was complaining to me that he’s put on a few kilos since he started.”
Citigroup first established its presence in France in 1906 and the business grew to become one of the firm’s most successful operations in Europe in the ensuing decades.
In 1940, the bank was forced to evacuate its Parisian branch as German troops were invading during World War II, leaving hundreds of staff to transport cash, securities, and files in trucks to the southern part of the country. The firm ultimately reopened the branch in 1948.
The more recent upgrade of the firm’s Paris offices is broader than just trading: The company has also been adding private bankers and commercial bankers to its ranks. In all, Citigroup ended last year with about 400 staffers in Paris, up from 170 immediately after Brexit.
“In France, it makes all the difference to have this local presence from key product partners,” Cécile Ratcliffe, Citigroup’s chief country officer, said in an interview, noting that included the private and commercial banking divisions as well as the firm’s treasury services and corporate banking offerings. “To see the growth of the markets franchise is so motivating for everybody.”
Citigroup is just one of dozens of US financial firms that, after decades of using London as a gateway to Europe’s single market, are now opening offices or bolstering existing operations on the continent to keep their access to the bloc.
Paris has emerged as a key destination for banks, as its local traders, trained at the country’s elite universities, also often worked on the structuring of Societe Generale SA’s and BNP Paribas SA’s most complex derivative products.
“What has brought people to Paris is the fact that it’s a very international town to begin with,” Lisanti said in an interview with Bloomberg Television. “There’s enormous amount of talent locally and some strong domestic players which have grown this talent.”
Goldman Sachs Group Inc., which recently moved to a new 9,000-square meter headquarters on the other side of the Arc de Triomphe, has grown from around 170 staff in 2017 to 350 at the end of 2022 in the country, with further hires expected in 2024. Morgan Stanley, housed in a palatial private residence built in 1874, set up a research center to support its trading activities last year.
JPMorgan Chase & Co., whose Paris headquarters was a relative backwater with 250 staff until Brexit, boosted its local headcount to 800 at the end of last year and expanded its office footprint with a new modern extension.
Hedge funds followed the trend. Millennium Management, Ken Griffin’s Citadel and ExodusPoint Capital Management have hired or opened offices in the French capital.
Citigroup has started the hiring process for summer interns and analysts across Western Europe. The company hopes to add 60 junior staffers across the region in the cohort, with the majority based in Paris.
The firm says it’s already reaping the benefits of its move into the French city. Last year, Citigroup dislodged rival JPMorgan as the No. 3 player in l’Agence France Trésor’s rankings of the top primary dealers in French government securities.
The move up the league tables means Citigroup is now the largest US bank helping place French debt with clients and securing liquidity for those assets on the secondary market.
“We’ve been able to hire talent in Paris that we would never have been able to attract in London,” Lisanti said. “One of the things we should not forget is us moving to Paris or to Europe, there is a strong commercial reason for that. We will cover our clients better, we will create better teams, stronger teams and ultimately be able to generate revenues more effectively and efficiently.”
–With assistance from Caroline Connan, Jody Megson and Todd McEvoy.
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