(19 June 2009 – USA) Citigroup’s chief executive has indicated that the bank will look outside its US home market for growth, as the US economy goes through an adjustment period.Citigroup’s chief executive officer, Vikram Pandit, told the Detroit Economic Club’s National Summit that while the US economy recovers, the bank will look abroad for added growth.
Businesses are going to have to search for new growth-drivers away from the US consumption and credit creation, Pandit said.
Pandit said that the US is going through an adjustment period marked by greater savings and less credit. He said that there is a clear trade-off between stimulating the economy on a short-term basis and saving more.
Citigroup’s over-dependence on US consumers played a large part in the extent of its financial woes. The company has incurred more than US$100billion (A$126bn) of credit losses and write-downs since the crisis began.
Citi had a business model that was predicated on ever-rising US consumer spending and credit creation, Pandit added. He said that the bank was very credit-dependent and relied too greatly on non-core, or wholesale funding sources, including securitisation and other aspects of the shadow banking system.
Despite the intent to focus more outside the US economy, Pandit said he was optimistic and that the country would benefit from new technology developed during the crisis.
He added that US regulators should focus on uniform regulation to restore trust in the financial markets that have been shaken during the financial crisis.