(28 August 2024 – Global) Citigroup is intensifying its efforts to expand its services to small and midsized businesses globally, aiming to double its commercial banking revenues amidst growing competition.
Recently, Citi has made strategic moves, including hiring a top banker from Barclays to lead efforts in the UK and launching its first dedicated unit for smaller companies in Japan, as reported in the FT.
Japan is the sixth country where Citi has launched dedicated commercial lending units in the past two years, following expansions in Canada, Switzerland, Germany, France, and Ireland. Citi has also appointed several new regional leaders, particularly in Asia, as part of its broader restructuring efforts.
The bank is confident that it can double its commercial banking business from $3 billion.
The push into commercial lending aligns with Citi’s strategy to simplify its operations and improve cross-selling capabilities. According to Tasnim Ghiawadwala, who leads Citi’s commercial bank division, the bank can now offer its midsized corporate clients the same payments services provided to large companies, generating incremental revenue with minimal investment.
Citi’s focus on smaller corporate borrowers – (SMBs) with annual revenues between $10 million and $3 billion – marks a shift from its traditional focus on serving only the largest companies. This move comes as regional banks face constraints in lending due to higher interest rates and commercial property losses.
Citi’s push into this segment puts it in more direct competition with the likes of Bank of America, JPMorgan Chase and Wells Fargo who all have much bigger commercial lending businesses.