Citigroup Expects to Cap Office Occupancy at 40% Without a Vaccine

Citigroup Inc. probably won’t bring even half of its workforce back to offices around the world until a coronavirus vaccine is available.

The bank has begun to return a small percentage of workers to offices globally, but has run into a consistent problem: public transportation. Employees are hesitant to use subways or buses to get to work, said Paco Ybarra, who leads the bank’s institutional clients group.

“If everyone was living close to the office and could walk to the office, I think my guess is we’d have many more people willing to come,” Ybarra said Thursday at a virtual conference hosted by the bank. “In any case, unless there’s a vaccine, and while the virus is still around, the max we can get to is 30% or 40% in offices.”

52,291 in U.S.Most new cases today

-7% Change in MSCI World Index of global stocks since Wuhan lockdown, Jan. 23

-1.​063 Change in U.S. treasury bond yield since Wuhan lockdown, Jan. 23

-2.​3% Global GDP Tracker (annualized), May

Citigroup this weekpostponed bringing back workers in U.S. states with surging coronavirus cases, including Florida and Texas. It is, however, moving forward with plans to return staffers to sites across the U.S. Northeast.

The firm, which has about 201,000 employees globally, ultimately plans to bring back all its workers, albeit slowly. Citigroup fashions itself an apprentice business that’s invested heavily in relationships among employees and with clients. While those ties remain during the pandemic, there’s a risk of “relationship equity” diminishing over time, executives said.

“People talk about the productivity gains and how efficient we’ve become in terms of working remotely -- I don’t know, I’m not certain how that ages,” Chief Executive Officer Mike Corbat said during the conference. “What I don’t want to do is find Citi in a place where we’ve actually hollowed out our talent in terms of the skills that we’ve given them.”

Trading, Underwriting

Ybarra, seated in his home office with a miniature putting green in the background, said the bank has seen record levels of trading and underwriting in the first half of the year -- activity that’s unlikely to sustain.

“We have had a really strong performance on the revenue side in the first part of this crisis because there’s been a lot of activity,” he said. “We expect that to slow down in the coming quarters.”

Ybarra cautioned that banks weren’t built for low or even negative interest rates. Still, he said, Citigroup has it better than European banks that have dealt with such an environment for years.

“This is the worst interest-rate environment and we are surviving well,” he said. “It’s easier for us compared to our competitors, but we don’t think of this as eliminating competitors. It’s not a game of survival where we want to be the last man standing.”

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