Citigroup

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Citi is today's pre-eminent financial services company and was built to create a highly diversified financial services company that could act as one to deliver solutions to clients throughout the world.

Citi's commercial and consumer businesses are carried out by the consumer banking group, which includes U.S. and international retail banking (offered by Citibank, CitiFinancial, Primerica Financial Services and Citibank Direct), U.S. consumer lending (including student loans, real estate lending and auto loans), international consumer finance, a commercial finance group (offering banking, leasing and commercial real estate), and a microfinance group. 

The global consumer group is one of Citi's biggest revenue drivers, typically bringing in more than half of each year's Citi-wide earnings.  The institutional clients group includes global banking services such as merger and acquisition advisory, debt, equity, restructuring and underwriting, as well as global capital markets, transaction services and alternative investments.  The global cards business encompasses Citi’s worldwide credit card business.

With some 200 million customer accounts in more than 100 countries, our history dates back to the founding of Citibank in 1812, Bank Handlowy in 1870, Smith Barney in 1873, Banamex in 1884, and Salomon Brothers in 1910.

With the most diverse array of products and the greatest distribution capacity of any financial firm in the world, our 350,000 employees manage 200 million customer accounts across six continents in more than 100 countries.

Citigroup's first cash infusion from the government came in October 2008 in a $25 billion capital injection from the Troubled Asset Relief Program, or TARP. The bank's breakup plan came after a stern regulatory warning it received in late November 2008, when its rapidly deteriorating share price prompted the government to give it a second cash infusion, of $20 billion. Federal regulators also leaned on Citigroup to shake up its board and on Jan. 21, Richard D. Parsons, the former Time Warner chairman, was named its new chairman.

A new strategy, put into place by its chief executive, Vikram S. Pandit, focused its executives' attention on its stronger remaining businesses while winding down its money-losing operations.

RESTRUCTURING AND A GREATER GOVERNMENT STAKE
By segmenting Citigroup into Citicorp and Citi Holdings, run by separate managers, Mr. Pandit seemed to be setting the stage for a spinoff of Citigroup's stronger operations, or an eventual merger. Meanwhile, reporting the two sets of businesses separately should burnish its quarterly results by making it clearer for investors to focus on its healthier operations.

On Feb. 27, Citigroup and Treasury officials reached an agreement that vastly increased government ownership of Citigroup, to 36 percent. Under the deal, the Treasury Department agreed to convert up to $25 billion of its preferred stock investment in Citigroup into common stock, giving taxpayers more risk, but more potential for profit if the company recovers. The government will not put in any additional money for now, but some analysts believe Citigroup may require more down the road.

Under pressure from federal regulators, the bank reorganized its management team repeatedly, naming three new chief financial officers in four months and swapping out or pushing aside other high-level executives. In July 2009, after the third shake-up in less than a year, some questioned how long Mr. Pandit would be able to hang on to his post as chief. The head of the F.D.I.C., Sheila Bair, openly pushed for Mr. Pandit's ouster, but she was overruled and he worked hard to rebuild his relationship with federal regulators.

The bank reported a $4.3 billion second quarter profit on July 17, 2009. But the happy result was driven by billions of dollars in one-time gains. Without its bonanza from a new joint venture for its Smith Barney division, Citibank would have lost billions.

And in October, the bank reported a big loss for its third quarter. Despite net income of $101 million, Citi had to account for $288 million in preferred dividends and a debt exchange that gave Washington 34 percent of earnings. The bottom line for shareholders: a $3.2 billion loss.

The results add to the mounting pressure on Mr. Pandit to turn around the troubled bank, which is one-third owned by taxpayers. Mr. Pandit has been trying to shrink the bank's balance sheet in the worst financial crisis since the Great Depression.

All the while, he is trying to find a way to repay part of the $45 billion in federal aid and get out from under the government's thumb. That has made it crucial for the bank to show investors it had a gain in the quarter, no matter how it eked it out - hence, stressing the $101 million in income from continuing operations.

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