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Citigroup

Citigroup

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Citigroup controls what is still one of the world's most widely spread financial brands, with a presence in more than 100 countries. It is the only truly global US bank. However it has also only recently recovered from a five year crisis prompted by the 2008 credit crash, which prompted the withdrawal from several weaker territories as well as a massive overhaul of its US service offering. The group still offers a wide range of services from traditional and investment banking to consumer finance, insurance, credit card services and asset management, and serves around 200m customers in more than 160 countries. But its involvement in subprime investments, as well as exposure to high-risk mortgage and credit card customers, led to substantial losses during the late 2000s, and a complete reshuffle of the group's senior management team. By the beginning of 2009, Citi was a pale shadow of the giant it had been three years earlier. Newly appointed CEO Vikram Pandit launched a review of operations which ultimately led to the decision to transfer Citi's loss-ravaged consumer finance, brokerage and asset management businesses into a separate "bad banks" company, pending its sale or gradual liquidation. That unit is still being wound down, and the group's slow recovery led to the abrupt departure of Pandit himself during 2012.

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Competitors

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Brands & Activities

In 2015, Euromoney named Citi as the world's Best Global Bank, capping the group's recovery from almost a decade of unprecedented turbulence not just within the group itself but across the whole financial services industry. Despite a complete overhaul of its own structure, and the elimination of many of its subsidiary businesses, it is now one of the last truly global lenders, offering a full range of consumer and wholesale services in more than 100 countries.

Citigroup's near crash in the mid to late 2000s followed a period of unbridled arrogance. The bank got a little carried away with itself in the early 2000s, upsetting governments, rivals and customers alike with aggressive, sometimes unprofessional banking practices. With size comes responsibility, and the group eventually acknowledged this in 2005, promising to mend its ways. Yet, while it curbed its outward arrogance, worse problems were developing behind the scenes, not least as a result of its disastrous foray into bonds backed by subprime mortgages. When these started to turn sour during 2007, Citi was forced to make huge write-offs, and the resulting losses led to renewed calls for a split of the bank's consumer and investment divisions.

The group's spiralling difficulties during 2008 led to a major cost-cutting drive, including the decision to eliminate around a fifth of its entire workforce and to sell non-core units. By November, however, confidence in the bank had fallen to new lows, and it was forced to seek emergency assistance from the US government, which agreed to inject $20bn of fresh capital and also guarantee around $306bn of toxic assets. Part of the preferred stock held by the US government to secure its financial assistance was converted to common equity later in the year, giving the state what was by early 2010 a shareholding of around 27% in the business. Those shares were sold during the course of the year.

In Sept 2008, Citi attempted to strengthen its US banking business by agreeing to rescue the retail and lending operations of even more troubled rival Wachovia for around $2.2bn. Under that plan, Citigroup would have taken over responsibility for around $700bn of Wachovia's mortgage and loan portfolio, supported in part by government guarantees, while the addition of Wachovia's branch network would have expanded Citi's retail presence significantly. It was not to be. Instead, smaller rival Wells Fargo, which had already held talks with Wachovia, made a surprise return to the table, trumping Citi's arrangement with an $11.7bn offer for all of Wachovia, and overtaking Citi by size in the process.

In the meantime, in January 2009, the group took the first steps in a substantial restructuring, separating itself into two separate divisions. The main Citicorp entity is still positioned as a "global universal bank" housing all the profitable businesses, while the group's more toxic subsidiaries are held within "bad bank" Citi Holdings, pending sale or gradual wind-down. The Citicorp "good bank" is itself composed of two major divisions, targeting retail and institutional clients respectively. Yet despite the line drawn around its bad bank activities, Citi is still plagued by recurring concerns among investors that its global scale is too difficult to manage effectively, especially by comparison with US rivals. Those fears were renewed in 2014 when Citi was the only one of the big American banks to fail capital stress tests imposed by US regulators. In Citi's case it was the second such failure in three years.

Global Consumer Banking

The main retail business operates under the banner of Citi Global Consumer Banking. Although it has exited several countries since the credit crisis, and intends to depart from several more, it still had around 2,451 branches spread across 19 countries by the end of 2017. It claimed in excess of 100m consumer clients worldwide, mainly in the three key regions of the US, Asia and Mexico. North America is still its biggest market by far. In the years leading up to the 2008 financial crisis, Citi expanded its coverage in the US through a series of regional acquisitions, including California Federal Bank in California and Nevada (acquired in 2002), and First American Bank in Texas (acquired in 2005). By 2011 the group had some 12.7m consumer bank accounts in North America and over 1,000 branches. Since then, though, many smaller or more regional branches have been shuttered as the bank concentrated its attention on six major metropolitan centres of New York, Chicago, Miami, Washington DC, Los Angeles and San Francisco. As a result, at the end of 2017, it offered checking, lending and savings services to 9.2m consumers and small businesses through around 694 branches. With customer deposits of around $171bn at the end of that year, Citi is the smallest of America's "Big Four" behind Bank of America, Chase and Wells Fargo.

In the home lending market, the group acquired the mortgage banking operations of Principal Financial of Iowa and ABN Amro's US Mortgage Group, both of which were combined with existing operations to form Citi Mortgage. Shortly after it reported results for 2012, Citi agreed to settle charges that it misled investors over its exposure to subprime mortgages between 2006 and 2008 by paying $730m in fines and damages. It agreed to pay a further $7bn in 2014 to settle a civil investigation into misselling of mortgage-backed securities. CitiMortgage was later transferred into the group's Citi Holdings "bad bank".

The group also offers retail banking services to around another 50m customers, mainly in Latin America, Eastern Europe and Asia. Key markets include Mexico, Poland, Russia and the United Arab Emirates as well as several markets in Asia of which the most significant are South Korea, Singapore, Hong Kong and Australia. In many international markets, Citigroup's consumer group mainly serves expatriate American consumers, certainly as far as retail banking is concerned. However there are several countries where the group has established a direct relationship with local customers as a result of the acquisition of a local banking or commercial finance business.

The most significant of these is CitiBanamex, the second largest bank in Mexico with around 1,480 branches, almost 28m clients, and 5.6m credit card accounts. Although its performance has generally been sound until recently, a $400m fraud was discovered there in 2013, resulting in the dismissal of more than ten senior and mid-level managers. Several other Latin American subsidiaries have been divested, including Citi's remaining operatrions in Brazil, sold to Itau in 2016.

Asia is another key region, with operations in South Korea, Singapore, Hong Kong, Australia and several other SE Asian markets. In 2004 the group strengthened its presence in Korea by acquiring a controlling stake in the country's 6th largest commercial bank, KorAm, for $2.7bn. That deal increased Citigroup's branch network in Korea substantially, and it now has 300 branches there. In 2006, a consortium led by Citigroup, and supported by IBM and four Chinese partners, was named as the preferred bidder for a combined 86% stake in Guangdong Development Bank (GDB), a comparatively small player by Chinese standards, with around 500 branches in 27 cities in the southwest of China. Citi ended up as the biggest individual shareholder with around 20%. The group's presence in Europe is less widespread. Its most important business in the region is Citi Handlowy in Poland, with 170 branches.

CitiCards is the world's largest issuer of credit cards, with 142m credit card accounts at the end of 2017, and $498bn in purchase volumes over the year. The group issues its own credit cards in all its various global banking markets, but the largest proportion of accounts - almost 90m in all - are for private label or co-branded cards. It has partnerships with numerous retailers and other companies around the world. The Citi AAdvantage card is the longest running airline rewards credit card, a partnership with American Airlines, and there are similar arrangements with other international airlines. In 2003 the group agreed to acquire Sears' credit card division for around $3bn, as well as the Home Depot credit card business. In 2005, it agreed to take over management of the credit card division of Macy's. The $7bn Best Buy card division was added during 2012 and the group also works with Shell, ExxonMobil and Hilton Hotels, among others. It became Costco's exclusive credit card partner in 2015. In 2006, the group issued its first co-branded cards in partnership with American Express. In 2008 it agreed a marketing partnership with concert promoter Live Nation to offer Citi customers preferred status on bookings and other offers for all the concert promoter's events. Diners Club, the first ever charge card service, operated for several years as a separate business within Citigroup's credit card arm. It was sold in 2008 to Discover for $165m.

Many local credit card units have been sold since 2008, especially in EMEA. The UK Egg credit card business, for example, acquired by Citi in 2007 from Prudential, was sold in 2011. Its cardholders and loans were acquired by Barclays, which had also previously purchased Citi's credit card units in Portugal and Italy. The group's German retail banking business was sold to Credit Mutuel in 2008 and now operates under the name Targobank. In China, the group has a strategic alliance with Shanghai Pudong Development Bank, and the two companies jointly launched China's first ever credit card in 2004.

Citi's global consumer banking division, which comprises the retail and credit card businesses, reported revenues of $32.70bn in 2017 and net income of $3.88bn. Cards is the most lucrative of the two businesses, contributing almost 60% of divisional revenues and 56% of operating profit. Almost 62% of combined revenues (and rather more of profits) were generated in North America, and most of the rest divided between Latin America and Asia.

Institutional Clients

The group's investment and corporate banking businesses operates as Citi Institutional Clients Group (ICG). This side of the business was restructured in 2002 following allegations that core unit Salomon Smith Barney had been involved in price-fixing and preferred allocations of new stock issues. That business was split in two, and the Salomon Brothers investment banking operation was absorbed into a slimmed down Citigroup Corporate & Investment Bank arm. This now offers a sophisticated range of global investment banking, capital markets and transaction services targeted at large corporations, governments and institutional investors. Among its most high profile investments in recent years was its role in the break-up of the British music group EMI. It loaned private equity firm Terra Firma the cash to buy that business in 2007, then seized back control in 2011 following default by Terra Firma, and sold it off into two parts to rivals Universal Music and Sony. ICG now has a physical presence in 98 countries worldwide, servingf multinational corporations, public sector organisations and high net worth individuals. It also houses Citigroup Private Bank, which provides personalized wealth management services for high-income clients in 16 countries worldwide. The unit claims to manage the affairs of almost a third of the world's wealthiest individuals.

Combined revenues for 2017 were $35.67bn, roughly two-thirds of that total from securities & investment banking, and one-third from transaction services. The division delivered an operating profit of $11.07bn.

Citi Holdings

Numerous other investment banking and asset management businesses have now been sold, having been hived off after 2008 into Citi Holdings, a so-called "bad bank", pending their gradual wind-down or elimination. In 2004 the group acquired ABN Amro's asset custody businesses in eight European and Asian markets. Subsequently it made a substantial investment in its Japanese retail brokerage operations as well. For several years, the company had operated in Japan through Nikko Citigroup, a joint venture with one of the country's leading brokers, Nikko Cordial. In 2007, Citi made an offer to acquire its Japanese partner for $10.8bn. When that initial offer was declined by two major shareholders, Citi increased its offer to around $13.5bn. That bid was accepted in April 2007, and the group acquired the remaining minority shares at the beginning of 2008. However, it was to prove an absurdly overpriced acquisition in the light of the group's subsequent troubles. The business was divested at a loss during 2009. The Japanese securities and asset management divisions were sold to local bank Sumitomo Mitsui; the trust banking unit was sold to Nomura.

Another divested business is the retail brokerage Smith Barney, which was spun off into a joint venture controlled by Morgan Stanley. The latter paid around $2.7bn to acquire an initial 51% stake in Smith Barney, which was merged with Morgan Stanley's existing wealth management unit under the name Morgan Stanley Smith Barney. It includes Smith Barney's UK operations under the name Quilter. A further shareholding was transferred to Morgan Stanley during 2012, but at a significantly lower price than had been anticipated, leading to additional impairment charges. Citi's remaining 35% shareholding in Morgan Stanley Smith Barney is held within Citi Holdings.

However the bulk of Citi Holdings was provided by what remained of the group's consumer finance and home lending operations. At its peak, CitiFinancial was the largest consumer finance operation in North America, serving around 4.3m customers through its own retail network of almost 2,500 branches across North America. It also operates in 23 other countries in Europe and Asia. It was formed from the acquisition of a series of businesses including the consumer finance division of Washington Mutual. Like other consumer finance businesses, CitiFinancial racked up considerable losses as a result of the credit meltdown. Following its transfer into Citi Holdings it was rebranded in 2011 as OneMain Financial to distance the business from the main Citi brand. Primerica Financial Services, which offers US consumer finance and insurance services sold door-to-door, was spun off as a separate quoted company in March 2010. CitiFinancial and CitiMortgage are gradually being wound down. By the end of 2014 there were still 1,400 branches in North America, and loans of almost $71bn, mostly for mortgages and home equity. In March 2015, Citi cleared out a large chunk of its "bad bank" assets with the sale of OneMain Financial to rival lender Springleaf. The deal price was $4.25bn, and is likely to generate a $1bn after-tax gain for Citi.

Also held within Citi Holdings is the group's Alternative Investments unit. This was originally a separate unit which specialized in riskier investment banking products such as hedge funds, private equity and real estate. In 2007, the group agreed to acquire hedge fund Old Lane, established by Vikram Pandit, previously one of Morgan Stanley's star traders. That business was subsequently merged into Citigroup's existing investment banking business to form a new Institutional Client Group. Pandit himself went on to be appointed as CEO of Citi at the end of the year.

Sponsorships

The group operates a variety of sponsorship and community programs. One of the most visible, in New York certainly, is the very popular Citi Bike sponsored bicycle-sharing scheme, with more than 6,000 bikes available for short-term hire. This launched in summer 2013, three years after a similar scheme in London sponsored by Barclays, and six years after Paris's Velib service. It also sponsors Team USA and the US Olympic Committee and has naming rights for Citi Field, home of the New York Mets MLB team.

Financials

The corporate and investment banking division was hardest hit by the 2007 and 2008 credit squeeze, because of its involvement in collateralised debt obligations (CDOs), a form of derivative bond securitised with subprime mortgages. It made huge writedowns in the valuation of its investments for both 2007 and 2008. As a result, in the latter year, that division was forced to report negative revenues of $7.8bn and a huge $19.9bn loss. Combined group revenues for 2008 plunged by a third to $52.8bn, compared to a high of $89.6bn two years earlier. Substantial writeoffs against subprime investments and consumer lending resulted in a staggering $18.7bn loss, a far cry from the $21.5bn profit reported by the bank in 2006.

There was a recovery of sorts in 2009, although the group continued to struggle with the after-effects of over-enthusiastic consumer lending. Group revenues returned to a more sensible level of $91.1bn on a managed basis, or $80.3bn after the effects of card securitisation. However, bottom line remained a net loss of $1.6bn after a near-$39bn provision for loan losses. There was finally an improvement in 2010, with revenues slipping 5% to $86.6bn, but net income bouncing back into the black at $10.6bn. There was another slide in revenues for 2011, down to $78.4bn, as the group divested further Citi Holdings assets, but net income continued to rise, helped along by cuts in credit provisions, reaching $11.3bn. However, results for 2012 were disappointing, dented by another round of charges and impairments, especially at bad bank Citi Holdings. Combined group revenues continued to decline, mainly as a result of a reduced contribution from Citi Holdings, slipping to $70.17bn. Net income reversed the previous two years' gains, falling to $7.54bn, the lowest level since 2009.

There was a solid recovery during the course of 2013, with total revenues rising to $76.37bn, while reported net income jumped 84% to $13.91bn. However that figure included a big gain from revaluation of the bank's own credit and debt valuations. Excluding such accounting adjustments, net income was up by a more modest 15%. On a divisional basis, Citicorp contributed revenues of $71.81bn, and net income of $15.80bn. After negative revenues from writebacks in 2012, Citi Holdings reported positive revenues of $4.54bn in 2013, and reduced losses of $1.9bn, down from over $6.5bn the year before. Another round of litigation expenses hammered performance for 2014, with net income almost halving to $7.3bn. Revenues edged up by less than 1% to $76.4bn. Total group assets at the end of the year were $1,843bn.

For 2015, the pace of recovery stepped up sharply. Citi beat analysts' expectation each quarter, and the absence of any significant legal expenses allowed net income to surge to $17.5bn for the year, Citi's best performance for almost a decade. Revenues continued to drift lower, slipping 1% to $76.35bn. Despite a much-improved final quarter, Citigroup was even weaker for 2016 as a whole, with net income slumping 14% to $14.9bn and revenues down 8% at $69.9bn, as a result of higher provisions for credit losses and further eliminations of non-core businesses.

On the whole, 2017 was a year of progress for Citi, but it was undone, on paper at least, by the impact of President Trump's Tax Cuts & Jobs Act. That prompted the group to write off almost $23bn of past tax credits, and resulted in a massive net loss for the final quarter. For the year, the group plunged to a net loss of $6.80bn. Excluding the tax impact, net income would have risen 6% to $15.80bn. Revenues rose 2% to $71.45bn. Total assets were $1,876bn. Citicorp remains the most international by far of the main US banks, generating just under half of revenues and profits outside North America. Its biggest international region is Asia (21% of revenues in 2017), with 16% from EMEA and 14% from Latin America.

For 2018, Citigroup delivered only a modest improvement in revenues to $72.85bn, but bottom line bounced back into the black at $18.05bn.

Background

This giant business was the creation of financial entrepreneur Sanford ("Sandy") Weill, who forged a merger in 1998 between his own Travelers Group and banking group Citicorp. However the corporate roots go back very much further. The City Bank of New York, later the National City Bank, was founded in 1812 by the first commissioner of the US Treasury, Colonel Samuel Osgood. Primarily a commercial bank, its main purpose was to support the city's fast-growing international trading community importing and exporting goods from around the world. In the early years of the 20th century the bank was the first to open branches worldwide, starting with London, Shanghai and other Asian centres in 1902, and in Latin America in 1904. By 1939 National City Bank had more than 100 branches outside the US.

Back home, the bank moved into retail banking, becoming the first commercial bank to offer personal loans during the 1920s. In 1955, the business merged with First National New York to form First National City Bank. In 1974 the enlarged group rebranded itself as Citicorp, and also that decade jumped into the credit card market with wide-ranging agreements with Visa and MasterCard. By 1977, the group's banking subsidiary Citibank was the largest US issuer of credit cards, a position strengthened by the acquisition of Carte Blanche in 1978 (later sold) and Diners Club in 1981. That year Citicorp overtook BankAmerica as the country's biggest bank, rolling out its retail banking service with an extensive ATM network. It also became a major lender to the new generation of US property entrepreneurs including Donald Trump. Internationally the group was also becoming increasingly involved in developing markets making substantial loans in Latin America.

As the 1980s boom turned to bust at the end of the decade, Citicorp was suddenly left very exposed by its over-generous lending program, with a $10bn portfolio of potential bad debt. As a result, in 1991 the business reported a loss of almost $460m. Required by the Federal Reserve to strengthen its capital base to avoid the danger of collapse, Citicorp went looking for $1bn of further funding from its shareholders but initially found no takers. The share price plummeted. Eventually the business was effectively saved by Prince Alwaleed bin Talal, a little-known member of the Saudi royal family, who paid around $800m for a 15% stake at the very bottom of the market. Just two weeks later a group of international investors backed Prince Alwaleed with a further $600m of shares. Citicorp was saved, and its shares subsequently soared in value, earning Prince Alwaleed an enduring reputation as one of the world's smartest investors. (He remains Citigroup's single biggest shareholder with just under 5%).

Meanwhile chairman John Reed embarked on a major clear out of loss-making assets, selling a large chunk of the property portfolio as well as a number of non-core subsidiary businesses. The group returned quickly to profit. By 1997 Citicorp had re-established itself as one of the world's most respected financial institutions with a global network of almost 3,500 offices in 98 countries, and the biggest worldwide credit card business.

At this point, Sandy Weill entered the picture. Weill was an investment banker by training. During the late 1970s he built up brokerage firm Shearson Loeb Rhoades, selling it to American Express in 1981. He left Amex in 1985, uncomfortable with that company's blue-blood country club corporate lifestyle. Weill bought finance business Commercial Credit, which he then used as the vehicle for a series of further acquisitions including Primerica, a financial services business which also owned brokerage Smith Barney Harris Upham. In 1993, he rescued what was left of Shearson from American Express, and also snapped up troubled insurance giant Travelers.

Travelers was in fact North America's first accident insurer, founded in 1864 in Connecticut. Over the following years the business had added a variety of new insurance services, including the first US car insurance, life insurance and travel insurance. During the 20th century Travelers had diversified widely, not least into the over-inflated property market during the 1980s. By the end of that decade the business was in a similar position to that of Citicorp. Weill set about consolidating all of his various assets under the Travelers brand, selling off life insurance. He merged the group's property and casualty operations with those of rival Aetna to form Travelers Property Casualty and floated a 15% stake. In 1997 he acquired investment bank Salomon Brothers, merging it with Smith Barney to form Salomon Smith Barney.

Yet while the business was now huge, with revenues of $37bn in 1998, it was also almost entirely US-based. That year Weill approached Citigroup's John Reed with the proposal for a mammoth $70bn merger, the biggest ever at that time. This pooled Citicorp's international network and credit card business with Travelers' wide ranging insurance and brokerage businesses, the first US business to bring all those services under one umbrella. (In fact under the terms of the Glass-Steagall Act introduced after the Great Depression of the 1920s, the combination of banking and insurance was strictly speaking illegal. However, Weill was confident that he could use the benefits of the merger to argue for a change in the law. The Glass-Steagall Act was superseded in 1999 by new federal provisions allowing for greater diversification of financial services companies). The next two years were spent in a process of consolidation, as the two giants gradually combined, shedding more than 10,000 jobs in the process, including ultimately Reed's. Initially, the two men shared the title of co-chairman & CEO; but their working relationship quickly deteriorated. Former US Treasury secretary Robert Rubin was hired as an intermediary, and Reed eventually stepped down in 2000. That year the group also acquired the investment banking arm of UK-based Schroders, as well as consumer finance company Associates First Capital. Citigroup also bought back the remaining public shares in Travelers Property Casualty.

In 2001 Citigroup acquired Banamex, one of the biggest banks in Mexico, took a 20% stake in troubled Japanese brokerage Nikko Securities, later Nikko Cordial, and also acquired the European American Bank from Dutch financial services giant ABN Amro. Also that year the group launched a global campaign designed to boost recognition of the Citigroup logo. Despite the group's mammoth size, the Citigroup brand has never enjoyed the proportionate brand strength or recognition of American Express, a company less than a third its size. As a result rumours periodically emerge that Sandy Weill might attempt a bid to acquire the smaller company before his ultimate departure from Citigroup. No such deal materialized, and Weill stepped down as CEO of Citigroup in 2003.

In 2002 the group once again floated a 20% stake in Travelers Property Casualty, raising $4bn in cash, and eventually spun off the remaining shares to shareholders. (Travelers agreed to merge with St Paul's Companies in 2004). In 2002 Citigroup acquired San Francisco's Golden State Bancorp for $5.8bn. However a few months later the group was dragged into investigations of failed groups Enron and WorldCom as a result of allegations that its brokerage arm Salomon Smith Barney had indirectly helped to manipulate those companies' share prices. Several lawsuits alleged that Citigroup's published research had deliberately painted too positive a picture of WorldCom's prospects in order to boost sales of a bond offer it had partially underwritten. As a result the group agreed to split the research and brokerage units into two separate businesses. Citigroup later agreed to pay $400m to settle accusations of conflicts of interest in its investment banking business. In 2004 it resolved a civil lawsuit over its involvement with WorldCom by agreeing a settlement of $2.65bn, of which more than $1bn was paid out to investors who lost money through the purchase of WorldCom shares. A year later a further $2bn was paid out to settle another case which claimed that Citigroup helped Enron engineer transactions to remove debts from its balance sheet. Yet another Enron case was finally settled in 2008 with a payout of $1.66bn.

Legal challenges piled on top of each other during the rest of 2004, caused in part at least by unorthodox behaviour by Citigroup employees. In summer 2004 the group upset rivals as well as regulators when it launched an unorthodox hit-and-run raid on the European government bond markets. Citigroup traders unloaded around €11bn of European government bonds in just two minutes, causing prices to plummet. Half an hour later they bought €4bn of the bonds at the much lower price, making a substantial profit. Faced with numerous complaints over the raid, the group issued an unprecedented apology. Regulators in the UK, Belgium, Portugal and Italy launched investigations soon afterwards. The UK regulator issued a $25m fine in 2005.

Also in 2004, Citigroup faced several obstacles in Asia. Japanese regulators forced the group to close its private banking unit there in September for violation of banking laws designed to prohibit money-laundering, and Korean regulators subsequently announced their own investigation of the local Citibank unit. The group was also sued by investment manager Globalvest which alleged Citigroup was involved in a scheme to devalue that company's investments in two Brazilian telephone companies so that it could buy them more cheaply. Humbled by these several embarrassments, the group apologised for its aggressive tactics and promised to work harder to earn the respect of the international community. Yet in 2005, there was further embarrassment when the group was forced to admit that computer tapes containing personal financial records for almost 4m American customers were lost by delivery service UPS while in transit to a credit bureau.

Also in 2005, the group agreed to sell life insurer Travelers Life and Annuity to MetLife for around $11.5bn. That deal marked effectively the final unwinding of the mammoth merger between Citibank and Travelers which took place in 1998. Also in 2005, the group swapped its Asset Management unit in the US for the private client brokerage and capital markets businesses of Legg Mason.

The growing problems which began to emerge in the 2007 led to a series of changes among the senior management team. Charles ("Chuck") Prince inherited the title of chairman-CEO from Sandy Weill in 2006, but resigned in November 2007 in the wake of the first substantial write-downs by Citigroup's investment banking division in connection with sub-prime mortgages. He was replaced as CEO at the end of the year by Vikram Pandit. Sir Win Bischoff, previously chairman of Citigroup Europe, was appointed as group chairman, but was eventually replaced in January 2009 by former Time Warner chief Richard Parsons. Former US Secretary of State Robert Rubin remained chairman of the executive committee through the tumult of 2007 and 2008, but also eventually tendered his resignation in early 2009. Sallie Krawcheck, previously chairman & CEO, Global Wealth Management, resigned abruptly in September 2008 after a disagreement on strategy. She was replaced by Michael Corbat.

Last full revision 4th May 2018

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