Citigroup

Citigroup Inc. {{nyse|C}} is one of the largest financial services company in the world. As of 2005 it is the third largest company in terms of market capitalization and the second largest in terms of assets. The formation of Citigroup was announced on April 7, 1998 through a merger of Citicorp and Travelers Group. It was the first US company to combine banking with insurance underwriting since the Great Depression. The company has over 275,000 employees and over 200 million customer accounts in 100 countries.

Divisions

Citigroup is divided into different divisions, each which contain many areas of business. The main divisions are Global Consumer, Global Corporate and Investment Bank, Private Client Services, and Global Investment management.

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The Global Consumer Group is comprised of three sub-divisions, Cards (credit cards), Consumer Finance, and Retail Banking. The credit card business on average delivers about 40% of the profits of this group. Citigroup is the largest provider of credit cards in the world, a position long held by Citicorp, and increased by many acquisitions of card portfolios. It provides credit cards in many countries even where it doesn't have branches, and advertises directly on TV and by direct mail. The Consumer Finance Division (called Citifinancial) accounts for about 20% of the consumer group's profits. This division engages in the controversial practice of high interest rate lending to people with bad credit histories, called "loan sharking" or "predatory lending" by critics. Although this was the core of the corporation from which other divisions were acquired, most of the size and stores of this division came from the takeover of Associates First Capital. Citifinancial is now the largest consumer finance company in the world.

Related Topics:
Credit cards - Consumer Finance - Retail Banking - Citifinancial - Associates First Capital

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The final division is the retail bank. This division consists of the normal retail branch system that banks are most known for. This goes by the brand name "Citibank". Citibank is about the fifth largest retail bank in the United States, and it has branches in countries throughout the world. The biggest part of retail banking however is Banamex, the largest bank in Mexico, which Citigroup owns. Overall the Global Consumer group contributes more than half of all the profits for Citigroup. If it were a separate company, it would still be in the top ten most profitable companies in the world.

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The Global Corporate and Investment bank consists of two subdivisions, capital markets & banking, and global transaction services. This division essentially handles large corporate cash management, lending, and Investment Banking. Citigroup's investment bank is one of the largest, frequently topping many League Tables. It does not engage in as much proprietary trading (stock and bond speculation) as do other investment banks. Most of the largest scandals of Citigroup have been from this division.

Related Topics:
Cash management - Investment Banking - League Tables - Proprietary trading

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Investment Management is composed of businesses whose outcome depends strongly on the investment decisions of the managers of that business. This division is also probably organized to divide up the labor equally amongst executive management. Included in this group is Life Insurance & Annuities (Travelers Insurance), Asset Management (mutual funds), and the Private Bank. Life Insurance & Annuities goes under the brand name Travelers Insurance, and sells those services wholesale through insurance agents and brokers around the world. Asset Management mutual funds are also sold primarily wholesale, under the brand names Salomon Brothers and Smith Barney. The Private Bank is a high end boutique bank designed to distribute financial products to the very wealthy. Citigroup runs the Private Bank in many countries where it doesn't have normal bank branches.

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The final division is called Private Client Services, a euphemism for a stock brokerage. This division is branded "Smith Barney", and is the second largest stock broker in the world. It usually contributes however, only around 6% of Citigroup's profits.

Related Topics:
Euphemism - Stock brokerage

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