CITIBANK HISTORY AND MANAGEMENT
Citibank was founded in 1812 as a consumer division for financial service multinational Citigroup. The bank headquarters is in New York City, and it has been in operation for 204 years. The first president of the bank was Samuel Osgood, who was a statesman and retired colonel. Later in the 19th Century, the bank’s ownership and management were taken over by Moses Taylor. The bank’s acted majorly as Taylor’s business treasury and finance center. The bank was formerly known as City Bank of New York and was later changed to the First National City Bank of New York (Spencer and Halbrecht, 1977). The company has a wide market both domestic and internationally. The domestic market holds 26% of its branches and generates approximately 51% of the entire revenue. The international branches include Latin America generating 25% of the total revenue, Asian market generating 20% of revenue and lastly, the Middle East and Europe generating 4% of the entire revenue (Aversa, 2012).
The Citibank CEO is Barbara Desoer, who is a member of Citigroup operating committee. The committee entails senior leaders from key regions and divisions of Citigroup. The bank’s board of governance has 16 members who oversee and offer guidance to operations of the group’s activities. The board is chaired by Citigroup CEO Michael L. Corbat. The constitution of a strong board of governance determines the success and adherence to prudential banking guidelines. The Citibank has demonstrated presence of strong board of governance due to its immense success in upholding vision and mission of the company. The company mission is to ensure growth and economic progress by responsibly providing financial service. The board ensures that management supports its core function of lending money, accessing capital market and safeguarding asset.
The banks have five consumer banking division. It entails credit cards, loans, personal accounts, investment, and insurance division. The divisions work for a common organizational goal of upholding company vision and mission of ensuring Citibank provides financial services that go in line with market dynamics.
The global financial crisis of 2008-2009 affected the bank since they had invested a lot in the mortgage assets. The US mortgage market experienced huge fall in value of subprime mortgage assets which lead to huge losses by financial institutions and real estate investors. The bank was bailed out by government in 2008 with injection of $50billion which was invested into the corporation and guarantees for risky assets valued at $306Billion (Aversa, 2012). The US government has recovered the full amount of loan advanced to Citibank since the bank performance greatly improved after being financed.
The great success was registered under the tenure of Charles Mitchell, who was elected as president in 1929 and later voted in as the chairman in 1929. He expanded the bank operations to 23 countries with 100 operational branches in the international market. The economist linked 1929 market crush to Citibank expansion to international market (Roberts, Cleveland and Huertas, 1989).
The bank became ‘one-bank holding’ company wholly owned by Citigroup shareholders in 1976 under the tenure of Walter Wriston. He also changed the name to Citibank in the same year to avoid confusion with National City Bank in Ohio. The bank is proud of being pioneer in automated banking card, credit card business and online banking. In conclusion, the bank’s ability to survive for more than 200 years in banking sectors demonstrate a good structure in transition of leadership in board of governance and management.
Aversa, J. (2012). Government plans massive Citigroup rescue effort. [online] Internet archive. Available at: http://biz.yahoo.com/ap/081124/citigroup.html [Accessed 24 Jun. 2016].
Roberts, R., Cleveland, H. and Huertas, T. (1989). Citibank, 1812-1970. The Economic History Review, 42(1), p.157.
Spencer, W. and Halbrecht, H. (1977). Interview with: William Spencer, President, Citibank, New York. MIS Quarterly, 1(3), p.1.