A tale a two Citi’s
(20 January 2009 – USA) Citi has announced that it will restructure its business into two operating units, splitting out core banking from the rest of the business.
The first, Citicorp, will be a relationship-focused global bank to businesses and consumers, consisting of both an Institutional and Retail bank.
Citicorp's Global Institutional Bank will consist of Global Transaction Services, Corporate and Investment Bank (refocused with a lower risk profile) and Citi Private Bank, which is said to encompass about 30 percent of the world's billionaires.
Citicorp's Retail Bank will consist of a branded card business globally, as well as regional consumer and commercial banking franchises in the U.S., Asia, Latin America, Central and Eastern Europe, and the Middle East.
Citi chief executive officer, Vikram Pandit, said that with lower risk and a streamlined set of businesses, Citicorp is expected to be a high-return and high-growth business.
The second business, Citi Holdings will be a group of non-core businesses that do not sufficiently enhance the capabilities of Citi's core business and in many ways compete for its resources.
The Citi Holdings businesses and assets will initially include brokerage and asset management (including the 49 percent stake in Morgan Stanley Smith Barney), local consumer finance and finally a special asset pool, which will manage the assets covered by the loss-sharing agreement with the U.S. government parties in the ring-fenced portfolio; and other non-strategic assets.
Pandit said that with the new Citi Holdings, the bank will be able to tighten their focus on risk management and credit quality for businesses with strong market positions but that are not central to the core franchise.
Citicorp's Global Institutional Bank will consist of Global Transaction Services, Corporate and Investment Bank (refocused with a lower risk profile) and Citi Private Bank, which is said to encompass about 30 percent of the world's billionaires.
Citicorp's Retail Bank will consist of a branded card business globally, as well as regional consumer and commercial banking franchises in the U.S., Asia, Latin America, Central and Eastern Europe, and the Middle East.
Citi chief executive officer, Vikram Pandit, said that with lower risk and a streamlined set of businesses, Citicorp is expected to be a high-return and high-growth business.
The second business, Citi Holdings will be a group of non-core businesses that do not sufficiently enhance the capabilities of Citi's core business and in many ways compete for its resources.
The Citi Holdings businesses and assets will initially include brokerage and asset management (including the 49 percent stake in Morgan Stanley Smith Barney), local consumer finance and finally a special asset pool, which will manage the assets covered by the loss-sharing agreement with the U.S. government parties in the ring-fenced portfolio; and other non-strategic assets.
Pandit said that with the new Citi Holdings, the bank will be able to tighten their focus on risk management and credit quality for businesses with strong market positions but that are not central to the core franchise.
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