Despite Recent Turbulent Truss Market, Citigroup Adds More Sterling Traders

In the wake of a doubling of revenue last year for Citigroup Inc.'s sterling rates desk, the company is bolstering its staff.

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As part of Citigroup's interest rate division, Su Liu, head of sterling trading within the rates division, has revealed that the company plans to hire three more junior traders after outperforming the market during the turmoil following the UK government's mini-budget in September. 

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According to people familiar with the matter, who wished to remain anonymous due to the private nature of the information, traders made over $200 million last year on gilts and sterling swaps, as well as inflation.

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The numbers were not made public by Liu or a spokesperson for Citigroup for obvious reasons.

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As a result of a surge in UK inflation in 2022 and the Bank of England's decision to raise interest rates to the highest level in 15 years, City of London firms benefited. According to Vali Analytics, the top 25 banks in the United States made $3 billion in sterling rates revenues in 2022, including Goldman Sachs Group Inc. and Morgan Stanley. Almost 45 percent more was earned in 2021, almost three times more than in 2015 and 2018. 

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Some desks were not damaged by the recent market volatility, but it is unclear whether that caused them to lose money. This month, the head of Nomura Holdings Inc.'s wholesale business said that its rate traders had rebounded from the market volatility caused by this month's banking industry woes, which had initially caused modest losses for the company. 

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In August 2021, Liu joined Citigroup after working for BNP Paribas SA and Goldman Sachs Group Inc. During the first half of 2022, she hired swap, short-end, and inflation traders and combined three teams into one, according to an interview conducted by her. A coach was hired to help improve morale, she said, by bringing in a new team. 

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It was when it was very volatile and stressful that we could allocate resources to the need very quickly, the reason why I studied neuroscience, which is why I am really interested in motivation and what motivates people to perform at their best.

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Expand Research's head of publications and insights, Jordan Galhardo-Burnett, says that sterling rates will continue to offer Wall Street business opportunities in the coming year. 

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“As inflationary forces weaken and inflationary pressures slow, most people expect that rates will slow down in the near future. However, any change in rates will present opportunities to the sell side," he said.