Sitting pretty at Citi?

Call it what you like, Citi (formerly Citigroup) is doing well. Does that make it a good place to work? Not everyone's convinced.

Last week the Financial Times ran a eulogy to Citi, pointing out that the world's biggest bank is now a force to be reckoned with from M&A through to corporate finance. This week, Financial News is on similarly flattering form, claiming the bank has "proved itself," "fine-tuned the use of its balance sheet" and employs "an increasingly impressive team of investment bankers."

With profits up nearly 50% in the first half iof 2007 and Citi ranking number two in the global M&A league tables this year according to Dealogic, there's little denying that the bank has broken out of the debt mould to become a big beast in M&A. But headhunters say there are still plenty of reasons to steer clear.

"Citi might look healthier according the league tables, but I don't sense any increase in happiness or stability there," says an M&A search consultant. "It's a huge machine run out of the US - which is fine in the current environment, but when the downturn comes it's stuck with a huge cost-base."

In fairness, Citi's already dealing with the bloat - one London derivatives headhunter says the bank is offering voluntary redundancies as part of its effort to cut 17,500 jobs globally. But he says there's still plenty of dead wood and gaps to be filled: "They've got a phenomenal ABS business, but despite hiring Michael Raynes last year as global head of structured credit, they are still weak across credit and rates. If you want an easy life working in a bottom tier-one firm, Citi is the place to go," he adds. "But if you're young and hungry, you're better off elsewhere."

Jonathan Baines, chairman of search firm Whitehead Mann, and a client of Citi, is one of the fans, however. "They're one of the success stories - if not the success story - of recent years," he says. "They are the organisation that has made universal banking work. Ten years ago if you'd asked me to identify the world-class bankers at Citi in Europe I could probably have counted them on one hand - now they are right up there with the very best of the investment banks."

Financial News points out that the eulogising may not last. Citi owes a large part of its recent increase in profits to principal transactions (prop trading) - no matter how many times it changes its name, it may prove hard to maintain that level of income if markets turn.