Citigroup, under the leadership of CEO Jane Fraser, is set to shutter its global distressed-debt group as part of an ongoing overhaul of the bank, according to sources familiar with the matter. The decision to exit businesses with poor returns is aimed at bolstering the bank's chances of meeting Fraser's performance targets.

Fraser, who took over as CEO in February, had announced a comprehensive overhaul of Citigroup in September. Since then, she has been actively undertaking measures to streamline the bank's operations, including trimming executives and reducing the scope of certain businesses.

Internally referred to as Project Bora Bora, the latest move to close the global distressed-debt group marks another step in Fraser's agenda to reshape Citigroup. The group, which engages in the trading of bonds and other securities of companies in or approaching bankruptcy, currently employs approximately 40 individuals.

Last week, Citigroup made headlines when it announced the closure of its municipal-bond trading operations, a business that had faced significant challenges in recent times. The closure impacted around 100 employees.

Citigroup declined to provide further comments on the decision to shut down the global distressed-debt group. However, sources familiar with the matter indicated that the move is aligned with Fraser's broader strategy of focusing on core areas with stronger financial performance and divesting from businesses that are not meeting targets.

Fraser's ongoing overhaul of Citigroup comes following the bank's history of underperformance in certain areas. By implementing strategic measures, she aims to position the third-largest U.S. bank by assets for improved financial performance and sustained growth.

As Citigroup continues its transformation, the closure of the global distressed-debt group underscores the bank's commitment to optimizing its operations and narrowing its focus on more profitable business lines. The impact of this decision on the affected employees is yet to be disclosed.

Citigroup's efforts to recalibrate its business model under Fraser's leadership will be closely watched by industry analysts and investors, as the bank seeks to navigate the evolving financial landscape and deliver sustainable long-term results.