Citi Group History: From Humble Beginnings to Global Presence

Citi Group has a rich history that spans over two centuries. The bank was founded in 1812 by Samuel Osgood and a group of merchants in New York City.

Citi Group's early success was largely due to its innovative approach to banking, which included offering a wide range of financial services to its clients. This approach helped the bank to establish a strong reputation in the industry.

In the mid-19th century, Citi Group expanded its operations to other parts of the world, including Latin America and Asia. This expansion marked a significant milestone in the bank's history and set the stage for its future growth.

The bank's expansion was fueled by its ability to adapt to changing market conditions and its willingness to take calculated risks.

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Citigroup was formed on October 8, 1998, following the merger of Citicorp and Travelers to create the world's largest financial services organization.

Founded in 1812 as the City Bank of New York, Citigroup has a rich history that spans over two centuries. The bank continued to expand and diversify its services over the next century.

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The bank changed its name to Citibank, N.A. in 1976, following its parent holding company's change to Citicorp. This marked a significant milestone in the company's evolution.

In 1998, Citicorp and the Travelers Group completed a $76 billion merger to form Citigroup, Inc. This merger represented a new era of horizontal expansion for the company.

Citigroup then began an acquisition spree that included acquiring Golden State Bancorp in 2002, adding 352 branches and approximately 1.5 million new customers to the company.

By then, the company was well on its way to having 3,000 bank branches and consumer-finance offices in the United States and Canada, plus an additional 1,500 locations worldwide.

Citi Group's early years date back to 1812 when Samuel Osgood founded the City Bank of New York.

The bank's early success was fueled by its role as a depository for the New York State government and its connections with the Erie Canal, which connected the Great Lakes to the Hudson River.

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In 1863, the bank changed its name to National City Bank of New York.

Alexander Hamilton's legacy played a significant role in the bank's development, as it was founded in the same year he died, 1804, but the bank didn't become a part of Citi Group until 1812.

The bank's early growth was also driven by its expansion into new markets and its innovative use of technology, including the introduction of the first cash register in 1879.

Citigroup has faced its fair share of challenges and scandals over the years. The bank was criticized for disrupting the European bond market by rapidly selling €11 billion worth of bonds in 2004.

The bank's involvement in the Terra Securities scandal in 2007 also raised eyebrows. In 1998, the General Accounting Office issued a report critical of Citibank's handling of funds received from Raul Salinas de Gortari, brother of Carlos Salinas, the former president of Mexico.

Some notable scandals include the Enron, WorldCom, and Global Crossing bankruptcies, where Citigroup was sued for violating federal securities laws and misrepresenting the bank's exposure to these companies. The bank paid $145 million in fines and penalties to settle claims by the Securities and Exchange Commission and the Manhattan district attorney's office in 2003.

The bank also settled a lawsuit concerning its role in selling stocks and bonds for WorldCom, paying $2.65 billion pre-tax in 2004. In 2005, Citigroup paid $75 million to settle a lawsuit related to Global Crossing's financial performance. The bank was accused of issuing exaggerated research reports and not disclosing conflicts of interest.

Here's a brief summary of some of the notable fines and settlements:

Citigroup's struggles in 2008 were a major consequence of the subprime mortgage crisis. By July 2008, they were described as struggling.

Their receipt of $25 billion in taxpayer-funded federal Troubled Asset Relief Program funds in 2008 didn't prevent a huge job cull. Over 100,000 employees were eventually let go.

Citigroup's market capitalization dropped from $300 billion to $6 billion in just two years. Shares of their common stock traded well below $1.00 on the New York Stock Exchange.

The US government intervened with a massive bailout for Citigroup in November 2008. The bailout was designed to rescue the company from bankruptcy while giving the government a major say in its operations.

In a bizarre mistake in 2020, Citigroup wired $900 million to the creditors of Revlon by mistake. They've been trying to get most of the money back, but so far, they've been unsuccessful.

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Citigroup was heavily involved in the Enron scandal, which led to the company's bankruptcy in 2001. The bank was accused of misrepresenting its exposure to Enron in its annual report and failing to disclose its true legal liability.

In 2003, Citigroup paid $145 million in fines and penalties to settle claims by the Securities and Exchange Commission and the Manhattan district attorney's office. This was just the beginning of the bank's troubles related to Enron.

Citigroup also played a role in the collapse of WorldCom, the second-largest telecommunications company in the world. The bank sold stocks and bonds for WorldCom, which ultimately led to the company's bankruptcy in 2004. Citigroup paid $2.65 billion pre-tax to settle a lawsuit concerning its role in the WorldCom collapse.

In 2002, Citigroup was sued for violating federal securities laws and misleading investors by issuing false information about Global Crossing's revenues and financial performance. The bank paid $75 million to settle the lawsuit in 2005. This was another example of Citigroup's involvement in the financial scandals of the early 2000s.

Here is a summary of the key dates and amounts related to Citigroup's involvement in the Enron, WorldCom, and Global Crossing bankruptcies:

These scandals had a significant impact on Citigroup's reputation and finances, and the bank continues to deal with the consequences of its actions in the early 2000s.

In 1933, Congress passed the Glass-Steagall Act, which forced NCB to liquidate its securities affiliate and curtail its line of special financial products.

NCB's chairman, James H. Perkins, implemented a defensive strategy to rebuild the bank's reputation and business, pledging to keep all domestic and foreign branches open and to eliminate as few staff members as possible.

Perkins' strategy continued after his death in 1940, and NCB went on to play a crucial role in financing World War II.

NCB amassed a large government bond portfolio and continued to stress its relationship with corporate clients, allowing it to regain its momentum in the banking industry.

Sixteen years after the stock market crash, NCB had finally regained its footing and was well-positioned to expand its business.

In contrast, Citigroup's recovery from the 2008 financial crisis was marked by controversy, including the payment of hundreds of millions of dollars in bonuses to its employees after receiving TARP funds.

Citigroup's return to profitability in 2010 was a significant milestone, with the bank reporting $10.6 billion in net profit, compared to a $1.6 billion loss in 2009.

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The Great Depression was a challenging time for many businesses, but for National City Bank (NCB), it presented an opportunity to rebuild and recover.

In 1933, Congress passed the Glass-Steagall Act, which forced NCB to liquidate its securities affiliate and curtail its line of special financial products.

NCB's size and organization allowed it to remain in business, but it had to adapt to the new regulations. The bank's reputation and business had fallen to number three, and it was a difficult task to rebuild.

James H. Perkins, who succeeded Mitchell as chairman in 1933, took on the challenge of rebuilding the bank's reputation and business. He instituted a defensive strategy, pledging to keep all domestic and foreign branches open and to eliminate as few staff members as possible.

This strategy helped NCB weather the storm, and by the end of the war, it was well placed in many markets. The bank had amassed a large government bond portfolio and continued to stress its relationship with corporate clients.

Citigroup achieved its first profitable year since 2007 in 2010, reporting $10.6 billion in net profit.

The government sold its remaining stock holding in the company, yielding an overall net profit to taxpayers of $12 billion, which is equivalent to around $16.4 billion in 2023.

A special IRS tax exception allowed the US Treasury to sell its shares at a profit, netting $12 billion. This rule was designed to prevent corporate raiders from using loss corporations to evade taxes, but it was never intended to address the government's ownership of shares in banks.

The government's majority holding of Citigroup's common stock led to restrictions on compensation and bonuses from February 2009 until December 2010.

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In 2009, the economy was still reeling from the financial crisis.

The government responded with a stimulus package worth $787 billion, which was signed into law by President Barack Obama in February 2009.

This massive injection of funds helped to stabilize the economy and prevent a complete collapse.

The stimulus package included funding for infrastructure projects, such as road construction and bridge repairs, which helped to create jobs and stimulate economic growth.

The automotive industry was another area that received significant support, with the government providing billions of dollars in loans to General Motors and Chrysler.

These loans helped the companies to restructure and emerge from bankruptcy, ultimately leading to their recovery.

Citi Group has a long history of expansion and growth, with a significant presence in international markets.

In 2011, Citi introduced digitized Smart Banking branches in several cities, including Washington, D.C., New York, Tokyo, and Busan, South Korea.

Citi also expanded its credit card operations in 2011, introducing new products such as Citi ThankYou, Citi Executive/AAdvantage, and Citi Simplicity cards in the U.S.

The company has a significant presence in the Asia Pacific region, reaping profits of $781 million in 1994, which was more than one-fifth of the company's total profits.

Citi operates in more than 96 countries and territories, including western Europe, Asia/Pacific, and Latin America.

In the mid-20th century, Citibank changed direction after the death of Gordon Rentschler in 1948 by moving more aggressively into corporate lending.

The bank acquired the First National Bank of New York in 1955, changing its name to the First National City Bank of New York, or Citibank for short, with assets of $6.8 billion.

Citibank used its bond portfolio to finance its expansion in corporate lending, selling off bonds to make new loans.

By 1957, however, the bank had just about depleted its bond reserve, leaving it in a tight spot.

The bank was prevented by New Deal legislation from expanding its business in private savings beyond New York City, making it even harder to find new funding.

The squeeze on funds only became more acute until 1961, when Citibank introduced a new product: the negotiable certificate of deposit.

The merger of Citicorp and Travelers in 1998 marked the beginning of Citigroup's expansion and growth. This deal allowed the new company to access each other's customer base for marketing financial products.

Travelers Group acquired all Citicorp shares, and the new company adopted Travelers' corporate logo, the "red umbrella", which was used until 2007. The chairmen of both parent companies, John S. Reed and Sandy Weill, became co-chairmen and co-CEOs of the new company.

Joe J. Plumeri played a key role in the post-merger integration, boosting Citibank's earnings from $108 million to $415 million in one year. Plumeri unexpectedly retired from Citibank in January 2000.

In 2000, Citigroup acquired Associates First Capital Corporation for $31.1 billion in stock, settling with the Federal Trade Commission for $240 million to customers who had been victims of predatory lending practices. The company also made additional acquisitions in 2001, including European American Bank for $1.9 billion and Banamex for $12.5 billion.

Citigroup's expansion led to the creation of principal operating units, including the Global Consumer Group and the Global Corporate and Investment Bank Group.

Citi was the first bank to introduce digitized Smart Banking branches in Washington, D.C., New York, Tokyo, and Busan in 2011.

In 2002, Citigroup acquired Golden State Bancorp and its California Federal Bank for $5.8 billion, expanding its presence in the US.

Citigroup entered the Texas market in 2004 with the purchase of First American Bank of Bryan, Texas, giving Citibank over 100 branches and $3.5 billion in assets.

In 2006, Citibank opened 23 branches in the Philadelphia metropolitan area, but closed them in 2013 for "efficiency-driven" reasons.

As of September 2020, Citibank's US branches are located in major metropolitan areas, with California home to the majority of its US branches, totaling 292.

Citi announced plans to return its retail banking presence to Dallas in 2022, taking over 9,000 square feet of space in the Berkshire Court building.

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Citi Branded Cards introduced several new products in 2011, including Citi ThankYou, Citi Executive/AAdvantage and Citi Simplicity cards in the U.S.

These new products demonstrate the bank's commitment to innovation and customer satisfaction. They also showcase the bank's ability to adapt to changing market needs.

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Citi Branded Cards also expanded its reach in Latin America with partnership cards for Avianca, Banamex, and AeroMexico.

The bank's merchant loyalty program in Europe is another example of its efforts to engage with customers and provide value-added services.

Citibank is the first and currently the only international bank to be approved by Chinese regulators to issue credit cards under its own brand without cooperating with Chinese state-owned domestic banks.

In 2012, Citigroup formed a joint venture with Orient Securities to create Citi Orient Securities, a Shanghai-based equity and debt brokerage.

This venture allowed Citigroup to tap into the growing Chinese market, expanding its reach and services.

Citi Orient Securities operated in the Chinese market until Citigroup sold its stake to its Chinese partner in January 2019.

In addition to this venture, Citigroup also made a significant move in 2016 by announcing the elimination of its bad bank, Citi Holdings.

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In 2021, Jane Fraser became the first female CEO of a Big Four bank, taking the reins at Citi.

Citi announced it would exit its consumer banking operations in 13 markets, including Australia, Bahrain, China, India, Indonesia, South Korea, Malaysia, the Philippines, Poland, Russia, Taiwan, Thailand, and Vietnam.

In 2022, UOB purchased Citi's consumer banking business in Indonesia, Malaysia, Thailand, and Vietnam for approximately $4.9 billion, and DBS Bank acquired Citi's consumer banking business in Taiwan for $706 million.

Citi continued to operate its consumer banking businesses in the US, Canada, Europe, and in Hong Kong, Singapore, London, and the UAE, across the entire APAC and EMEA regions.

In January 2022, Citi announced it would exit consumer banking in Mexico, as well as small-business and middle-market banking operations.

The company disclosed an exposure of over $10 billion in Russian assets, which may be materially affected by Russia's expulsion from the SWIFT banking system.

In September 2022, Citi planned to shutter its retail bank business in the United Kingdom.

In 2024, Citi announced it would be cutting 20,000 jobs from the company.

The company also reported that it would move significant portions of its financial infrastructure to Google Cloud in October 2024.

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In 2015, Citigroup announced the sale of its margin foreign exchange business to FXCM and SAXO Bank of Denmark. This deal included CitiFX Pro and TradeStream, marking a significant shift in the bank's foreign exchange operations.

The sale didn't mean Citigroup was exiting the foreign exchange market altogether - in fact, industry surveys pegged the bank as the biggest player in the forex market. James Bindler took the reins of Citigroup's remaining foreign exchange sales & trading businesses in 2015.

In February 2016, Citigroup sold its retail and commercial banking operations in Panama and Costa Rica to the Bank of Nova Scotia (Scotiabank) for $360 million. This deal included 27 branches serving approximately 250,000 clients.

Citigroup continues to offer corporate and institutional banking and wealth management in Panama and Costa Rica. On April 1, 2016, Citigroup became the exclusive issuer of Costco-branded credit cards.

Here are the key markets where Citigroup has exited or is in the process of exiting its consumer banking operations:

Naming rights to sports venues can be a lucrative deal for companies. Citigroup owns the naming rights to Citi Field, the home ballpark of the New York Mets Major League Baseball team.

The deal was signed for a whopping $400 million, which is equivalent to about $552 million in today's dollars. This 20-year deal began in 2009, when the stadium first opened.

Citibank sponsors a wide range of events and teams, demonstrating its commitment to growth and expansion.

In the world of sports, Citibank has a long history of sponsorship. The firm has been a major sponsor of the Australian Football League's Sydney Swans since 2005.

Citibank also sponsors the New York Mets baseball club and the Washington Open tennis championship, showing its support for popular sports events.

Citi Group has a long history of financial performance, with notable milestones in revenue and net income. In 2005, the company's revenue was $80.077 billion, a figure that would fluctuate over the years but ultimately peak in 2019 at $75.501 billion.

The company's net income also saw significant changes, with a high of $24.589 billion in 2005 and a low of -$27.684 billion in 2008. The latter was a result of the financial crisis, which had a profound impact on the global economy.

One notable aspect of Citi Group's financial performance is its asset growth. The company's assets increased steadily from $1.494 trillion in 2005 to $2.416 trillion in 2021.

Here's a breakdown of Citi Group's revenue and net income from 2005 to 2023:

In contrast to the company's revenue and net income, its employee headcount declined over the years, from 296,000 in 2005 to 239,000 in 2023.

Citi Group has had a long and storied history of leadership and governance. The bank's first President, Samuel Osgood, was elected in 1812, marking the beginning of the company's leadership.

The bank's leadership structure has evolved over time, with the position of Chairman being introduced in 1909. James Stillman became the first Chairman of the company in 1909, a position he held until 1918.

Here's a list of some of the notable Chairmen of Citi Group:

Today, Citi Group is led by a strong and experienced team, with Jane Fraser serving as CEO since March 2021 and John Dugan as Chairman since January 2019.

Citibank employs approximately 93,700 individuals worldwide.

The company prioritizes leadership, teamwork, and building effective control environments for managing cooperatively.

Citibank's employee evaluation system is constantly being improved to ensure that a person's qualifications best suit their job description.

Racial issues have been a concern at Citibank, with two black employees filing a lawsuit claiming they faced discriminatory treatment.

The lawsuit alleged that white co-workers had sent racist emails, and that the plaintiffs were denied promotions, received less pay, and witnessed racially stereotypical conversations by supervisors.

Analysts' Opinions were divided on Citicorp's recovery after 1991, but many saw a company with promising prospects for the future.

Some analysts questioned Citicorp's strategy of selling brand recognition for customer loyalty, citing advances in technology that could make customers less loyal.

Citicorp's fourth-quarter earnings in 1996 exceeded Wall Street analysts' expectations, with a per share increase that impressed investors.

By repurchasing $820 million of its stock in 1997, Citicorp demonstrated its confidence in its future prospects and showed investors it was committed to its growth.

CEO John Reed defended Citicorp's strategy, claiming that the competition hadn't yet shaped up to challenge it.

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At Citigroup, the senior leadership team is headed by John Dugan, who has been the Chairman since January 2019.

The current CEO, Jane Fraser, took over in March 2021, bringing a wealth of experience to the role.

Mark Mason has been the Chief Financial Officer since February 2019, overseeing the bank's financial strategy.

Here's a quick rundown of the current senior leadership team:

Citigroup faced criticism for its role in the 2004 government bond trading scandal, where the company rapidly sold €11 billion worth of bonds, driving down the price and then buying them back at cheaper prices.

This move disrupted the European bond market and raised concerns about market manipulation.

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In 2008, the US government intervened in a major way to stabilize Citigroup, a struggling bank.

Citigroup received $25 billion in taxpayer-funded federal Troubled Asset Relief Program funds, but it wasn't enough to prevent massive job cuts.

By November 2008, Citigroup announced plans for about 52,000 new job cuts on top of 23,000 cuts already made that year.

The company's stock market value dropped to $6 billion, down from $300 billion two years prior.

In a desperate bid to stabilize the company, Citigroup and Federal regulators approved a plan to stabilize the company and forestall a further deterioration in the company's value.

The US government announced a massive bailout for Citigroup, designed to rescue the company from bankruptcy while giving the government a major say in its operations.

The bailout called for the government to back about $306 billion in loans and securities and directly invest about $20 billion in the company.

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Citigroup received the largest amount of TARP funding, a larger bailout than any other US bank.

The Treasury provided $20 billion in Troubled Asset Relief Program funds in addition to $25 billion given in October.

As a result of the bailout, Citigroup agreed to give the US Treasury $27 billion of preferred shares and warrants to acquire common stock.

The government obtained wide powers over banking operations, including capping executive salaries and requiring the company to modify mortgages using standards set up by the FDIC.

Citigroup's dividend payment was reduced to $0.01 per share as a condition of the federal assistance.

In 2010, the government's majority holding of Citigroup's common stock led to restrictions on compensation and bonuses, which were in place until December 2010.

Citigroup faced regulatory scrutiny for its actions in the 2004 bond trading scandal, where it rapidly sold €11 billion worth of bonds and then bought them back at cheaper prices.

The bank's actions were criticized for disrupting the European bond market. This move was seen as a form of market manipulation.

Citigroup was criticized for disrupting the European bond market by rapidly selling €11 billion worth of bonds on August 2, 2004, on the MTS Group trading platform, driving down the price and then buying it back at cheaper prices.

As a result of the scandal, Citigroup faced lawsuits and arbitration claims from investors who claimed to have lost money due to the bank's actions.

Citibank is one of the lead lenders to the Dakota Access Pipeline project. The pipeline spans 1,172 miles, or 1,886 kilometers, and has been a source of controversy.

The project has been criticized for its potential environmental impacts and its effects on Siouan sacred lands and water supply. The pipeline's route has been a major point of contention.

Citibank's involvement in the project has been significant, with Hugh MacMillan stating that the bank "ran the books" on the project and helped recruit other lenders. This has led to widespread criticism of the bank's role in the project.

Students at Columbia University took action against Citibank's involvement, protesting outside a Citibank location on campus in December 2016. The university even replaced the on-campus Citibank ATMs with ATMs from Santander Bank, which has no ties to the Dakota Access Pipeline.

Citicorp was founded as City Bank of New York, which was later renamed National City Bank of New York. The company merged with First National (New York) and became First National City Bank.

The company was incorporated in Delaware in 1919, marking a significant milestone in its history. It also created a holding company called First National City Corp. in the same year.

Citicorp became the largest issuer of credit cards and acquired Carte Blanche and Diners Club, surpassing Bank America to become the largest U.S. bank. John Reed became chairman of the company in one of its many leadership changes.

Citicorp was founded as City Bank of New York, marking the beginning of its long history.

The company went through several name changes, being renamed National City Bank of New York, then First National City Bank after merging with First National (New York).

In 1950, Citicorp incorporated in Delaware, a significant step in its growth and expansion.

First National City Corp. was created as a holding company, paving the way for further mergers and acquisitions.

Citicorp became the largest issuer of credit cards, a notable achievement in the financial industry.

The company acquired Carte Blanche, expanding its presence in the credit card market.

Citicorp acquired Diners Club, surpassing Bank America to become the largest U.S. bank.

John Reed became chairman, leading the company through a period of significant growth and change.

Citicorp acquired Great Western Leasing and Great Western Credit companies, further diversifying its portfolio.

The U.S. government set limits on the number of loans a company could make, prompting Citicorp to begin issuing Photocards.

Citicorp merged its savings banks to create Citibank, FSB, a move that streamlined its operations.

Citicorp opened the first foreign-owned commercial bank in Russia, marking a significant milestone in its international expansion.

The company sold Quotron Systems, Inc., a move that freed up resources for further growth.

Citicorp became the first U.S. bank to conduct yuan-based transactions in China, a testament to its global reach.

Citicorp acquired AT&T Universal Card Services, expanding its credit card business.

Citicorp and Travelers Group announced plans to merge and form Citigroup Inc., a move that would shape the future of the financial industry.

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2014 was a significant year for technology, with the launch of the Apple Watch, a wearable device that marked a new era in personal technology.

The Ebola outbreak in West Africa reached epidemic levels in 2014, with cases reported in Guinea, Liberia, and Sierra Leone.

The World Health Organization (WHO) declared the outbreak a public health emergency, and international aid efforts were mobilized to contain the spread of the disease.

The 2014 Winter Olympics took place in Sochi, Russia, from February 7 to 23, with 98 events in 15 sports.

The Sochi Olympics were the most expensive Olympics in history, with a price tag of over $50 billion.

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