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EXECUTIVE SUMMARY
The Citibank is the banking division of Citicorp that was founded in 1812 as the City Bank of New York. It is considered to be the third largest bank based on their total asset size. Citicorp is the Citigroup’s global bank that provides its services for businesses and consumers and also represents its major franchise. Citigroup is a multinational financial services and banking corporation located in Manhattan, New York City in United States of America. The Citigroup was formed with the help of one of the largest mergers in the history of the financial industry when the financial conglomerate Travelers Group merged with Citicorp in October 1998. It was the global bank of Citigroup that developed a credit card system, foreign exchange transaction services, automated teller machine (ATM), and Smart Banking system. Even though, the group is operating in more than 160 countries and over 1000 cities they are still strongly linked to their effective leadership skill, responsible financial services, common goals, and purposes. There are three main competitors of Citigroup: JP Morgan, HSBC Holding and Bank of America Corporation. JP Morgan currently has more than US$ 2.4 trillion assets, that makes it the largest bank in the United States. The future outlook of the Citigroup is bright as it has been able to revive its financial position after the financial crunch of 2008 with severe job cuts and the downturn.
Introduction 4
The First 100 Years 5
The Second 100 Year 6
Citigroup Today 8
Conclusion 9
Work Cited 11
Introduction
Citigroup is a multinational financial services and banking corporation located in Manhattan, New York City in United States of America. The Citigroup was formed with the help of one of the largest mergers in the history of financial industry when the financial conglomerate Travelers Group merged with Citicorp in October 1998. The Citibank is the banking division of Citicorp that was founded in 1812 as the City Bank of New York. It is considered to be the third largest bank based on their total asset size. Citicorp is the Citigroup’s global bank that provides its services for businesses and consumers and also represents its major franchise. The Citigroup global bank is focused upon providing the best financial services and products to its customers and leverage facilities that also offers an incomparable network of services offered at global level even to emerging economies. The Citicorp has been established for more than 100 years now and offers its services in 160 countries. The largest shareholders of Citibank are from Singapore and the Middle East (Rexrode, p.1).
Throughout the group’s history, innovation and advancement have been entrenched in the company’s culture. The group has been ahead of other organizations, to offer new financial product and services to both commercial and consumer clients so that their lives are made simpler and easier. It was the global bank of Citigroup that developed a credit card system, foreign exchange transaction services, automated teller machine (ATM), and Smart Banking system. Even though, the group is operating in more than 160 countries and over 1000 cities they are still strongly linked to their effective leadership skill, responsible financial services, common goals and purposes (Chittum, p.1).
The First 100 Years
The Citibank is the banking division of Citicorp that was founded in 1812 as the City Bank of New York with US$ 2 million of capital. The same year, the City Bank of New York, started its business operations while serving the merchants of New York City. The first president of the company was Samuel Osgood. In 1865, the bank’s name was changed to The National City Bank of New York after the bank joined the United State’s national banking system operations and was considered to be the largest American bank in 1895 (Citigroup, p.1).
One of the major accomplishments of the Citigroup is the assistance in the development of the Great Transatlantic Cable project. The transmission of information and goods that took weeks was now a matter of keystrokes and costed around US$ 10 per word which could be accomplished within minutes. This was an underwater project that was achieved with the support of Citigroup as it not only financially supported the project, but also the group’s president served as a director and treasurer of the underwater cable company. This step helped in the development of the project with financial advice at professional level (Citigroup, p.1).
The Panama Canal is an important investment case of Citigroup made in 1904. The idea of the Panama Canal can be easily traced back to the start of the 16th century, but the concept remained as a dream as the construction technology was simple and the plan of construction was challenging and complex which withheld or delayed the development of the Panama Canal. After a few centuries, the French wanted to pursue the development of the Panama Canal but there were still issues in construction design and engineering which was further delayed due to the outbreak of plague. After more than a decade, the United States acquired the canal’s excavation right and completed the Panama Canal in 1914, that eventually helped in fulfillment of a 400 year old dream. These funds were eventually sponsored by Citi Bank, which helped with easy access and transportation for daily business activities (Citigroup, p.1).
In 1913, the bank became the first major contributor to the Federal Reserve Bank of New York and the first overseas U.S. branch was inaugurated in Buenos Aires. The bank was already providing its financial help and support in international business projects as discussed above and in mid-19th century helped the Cuban sugar industry to support active plantation. The acquisition of the United States overseas bank, International Banking Corporation, established the bank as the first American bank that held over US1 billion assets in 1918. Apart from this, in 1929 it became the world’s largest commercial bank. With the growth and development of the bank, came innovative financial products and services for both commercial and consumers and it was the first bank in the country that offered the concept of compound interest rates on investments in 1921 and customer checking accounts in the year 1936 (Appelbaum, p.1).
The Second 100 Year
In 1955, the bank was named as The First National City Bank of New York, whereas the name was shortened to the First National City Bank when the group celebrated their 150th anniversary in 1962. The First National City Bank was the first bank to introduce the U.S. dollar denominated certificates of deposit in the London market, which became the first negotiable financial instruments since the year 1888 and the work was done to develop the credit card and leasing sectors as well to provide financial products and services to the prospective customers. The first credit card was introduced in 1967 that was known as the Everything card which later became like the most famous and well-renowned Master Card (Citigroup, p.1).
The bank was renamed as the Citibank N.A. in 1976. Later on, the first Citicard was launched that helped in 24 hour ATM services for the customers. Under the leadership of John Reed, the global bank marked its most successful and accomplishing 14 years where it became the largest issuer of charge cards and credit cards in the world along with maintaining the status of the largest bank in the country. The global business operations were now expanded to more than 90 countries. John Reeds believed that consumer banking will remain at the heart of financial banking services due to which he wanted to innovate the product offerings with a variety of services. An important thread in the era of Reed was the successful implementation of ATM. Since there were no experienced suppliers, the bank developed its own software, hardware and introduced the automatic teller machine. The first machine was launched in 1977 and by the end of this year, at least every branch of New York had at least two machines that operated for 24 hours / 7 days a week. This helped launch the slogan “ Citi never sleeps.” (Appelbaum, p.1).
The Citigroup was formed with the help of one of the largest mergers in the history of financial industry when the financial conglomerate Travelers Group merged with Citicorp in October 1998. This helped in the creation of a firm with at least US$ 700 billion of assets and US$ 140 billion worth. On April 6, 1998, the merger between Citicorp and Travelers Group was announced to the world, creating a $140 billion firm with assets of almost $700 billion. This deal would basically enable the Travelers group to focus upon the insurance and mutual funds to retail customers of Citicorp’s and the banking division was expanded to insurance buyers and potential investors (Doran, p.1).
In 2009, the Citibank expanded its business operations to offer mobile banking with smartphones in order to accommodate the online customers that were conveniently using handheld devices, Blackberry and iPhone. The new mobile services, allowed the users that had access to Internet, to view their account activity, statements and make transfers and payments between any Citi account, along with connecting to customer services and locating branches and ATMs nearby. One of the most important feature offered by CitiMobile for the users of smartphones was that it provided access to customers to set-up their online account, even if they had no online account with full features of online banking services. The credentials were created immediately, which could be changed later on (Bruno Britz, p.1).
The provision of these services and following its vision of innovation in financial services, the Citigroup introduced the first smart banking in 2010. The test trial was performed in Japan and then in Tokyo, the first smart branch was established. When the customers entered the branch they were greeted by a media wall that provided financial updates, latest news etc according to the location. Touch screens were implanted that provided different services and the staff were present to provide assistance to the customers in branch or via live video conferencing. When the bank was able to successfully operate a few branches and establish new smart branches, it was termed as the top retail bank in Japan. In just one year, Citi established 48 smart banking branches in more than 11 countries. The branches were located in Philippines, Singapore, Taiwan, etc. (Appelbaum, p.1).
Citigroup Today
The Citigroup celebrated its 200th anniversary in 2012. There are three main competitors of Citigroup: JP Morgan, HSBC Holding and Bank of America Corporation. JP Morgan currently has more than US$ 2.4 trillion assets, that makes it the largest bank in the United States with over 5,500 branches in the country with more than US$ 128 billion given as credit card loans. This makes JP Morgan as the largest lenders of mortgage (Hoovers, p.1). The second major competitor is HSBC Holding which is geographically diversified company. It is considered to be among the largest banking groups across the world and is the leader in customer deposits – US$ 1 trillion. The corporation has its business operations throughout the world with more than 7200 business locations in 80 countries (Hoovers, p.1). The third major competitor is Bank of America Corporation that is considered to be the country’s largest bank by asset after JP Morgan and Citigroup. The bank has an extensive branch networks with more than 16,000 ATMs and banking operations in more than 5,000 locations (Hoovers, p.1).
Recently, Citigroup has passed its annual stress test. The result of it was that it announced to its investors that it will be raising the dividend share to five cents a share, that can be considered the company’s first increase after the 2008 financial crisis. The Federal Reserve has given the group a signal that it can also buy back US$ 7.8 billion of its own shares. This announcement led the company share to rise by 3.3 percent last month (Rexrode, p.1).
Conclusion
The Citigroup global bank is focused upon providing the best financial services and products to its customers and leverage facilities that also offers an incomparable network of services offered at global level even to emerging economies. The group has been the pioneer of automated teller machines, credit cards, master cards, mobile phone banking, smart branch banking. The group has financed and actively participated in the development of underwater cable networks, Panama Canal and plantation economies. Even though the group is operating in more than 160 countries and over 1000 cities they are still strongly linked to their effective leadership skill, responsible financial services, common goals and purposes. The future outlook of the Citigroup is bright as it has been able to revive its financial position after the financial crunch of 2008 with severe job cuts and the downturn. The passing of stress test, is a big sign of relief as this demonstrates that the group has survived and will be able to maintain its financial position like before. It is important to note that financial giants like Citigroup can temporarily suffer from the economic or international financial crunch, but they cannot become insolvent or liquidate easily because of their penetration into international markets, pioneering of financial services and products etc.
Work Cited
Appelbaum B. Citi's Long History of Overreach, Then Rescue, Washington Post, (2009), p.1.http://www.washingtonpost.com/wp-dyn/content/article/2009/03/10/AR2009031003391.html
Bruno Britz. Citi Expands M-Banking to More Smartphone Devices, Bank Systems & Technology, (2009),p.1, http://www.banktech.com/channels/citi-expands-m-banking-to-more-smartphone-devices/d/d-id/1293097?
Chittum R. 200 Years of Citi: An alternate history, Columbia Journalism Review (2012), p.1., http://www.cjr.org/the_audit/an_alternate_history_of_citigr.php
Citigroup. Citigroup History, (2014), p.1. http://www.citigroup.com/citi/about/mobile/200years/article-list.html
Doran J. Citigroup: Ten years of turmoil, The Guardian, (2008), p.1. http://www.theguardian.com/business/2008/nov/21/citigroup-banking1
Hoovers. JP Morgan, Hoovers, (2014), p.1.http://www.hoovers.com/company-information/cs/company-profile.JPMorgan_Chase__Co.847754f4ce985207.html
Hoovers HSBC Holdings, Hoovers, (2014), p.1. http://www.hoovers.com/company-information/cs/company-profile.HSBC_HOLDINGS_PLC.daa22615c466b415.html
Hoovers Bank of America Corporation, Hoovers (2014), p.1.http://www.hoovers.com/company-information/cs/company-profile.BANK_OF_AMERICA_CORPORATION.183a83bb3df4e047.html
Rexrode C. Citi Gives Itself 3 Cheers on 'Stress Test', Nasdaq, (2015), p.1, http://www.nasdaq.com/article/citi-gives-itself-3-cheers-on-stress-test-20150312
