Inside Citigroup’s plans for emerging markets domination | Citigroup builds on diversity in CEEMEA | All hands to the pump in Latin America | Citigroup still looking for more from Asia
One of the criticisms of the bank is that there’s a battle between product and geography. What’s your view on this?
If you had asked me that question two years ago I would have given a different answer. Two years ago, and historically in the CIB, the global products had a greater than 50% weighting. Now I would say it’s much more even. We set that out as a goal and we make sure that we get agreement on important issues where product and region intersect, such as key personnel decisions – for example, budgets. We have come a long way in balancing the two.
Is the reorganization of the CIB now complete?
No organization is ever static but you should not expect major shifts. We’re pretty comfortable with the organization as it stands, in terms of structure. It’s been less than two years since the reorganization. It’s working to our satisfaction. It doesn’t mean we’ll never make any changes. Nothing is without change.
How easy is it to marry the corporate banking and the investment banking franchises?
We have not merged them. There is a corporate bank and there is an investment bank. They both report to the same person, Michael Klein, which was one of the outcomes of the reorganization. That was done for very specific reason because one of the things that we think we have is a world-class corporate bank and a world-class investment bank.
But they are very distinct cultures.
They are different and they have different focuses but they have to work very closely together to deliver the combined capability to the client. It’s easier to do that when they report to one person. We also look at all of our client-facing organizations to work in partnerships. So transaction services, which is outside the banking division, and capital markets, which is outside the banking division, regularly meet together with the banking division to service our clients holistically. You now have just three groups: banking, capital markets and GTS. It’s a lot easier to get that done than if you had seven groups, which is what we had before.
Do you think you have sufficient depth in terms of your client base?
We’re expanding our client base. We have a couple of very important initiatives under way to grow our client base.
What are these initiatives?
We’ve formed what we call the National Corporate Bank and the National Investment Bank. These are geared towards companies that have sales from $500 million to $4.5 billion. This was a market in which we were in, but not in size. After the Citibank/Travelers merger we focused on the very high end global clients so we didn’t really grow our client base for a number of years. Now, though, we’re beginning to do that again.
Competition is always tough but we are doing it internationally and locally in a measured, reasoned way.
Critics say that you’re not maximizing your potential. How would you respond?
I think we have more work to do. We are making very good progress in a number of areas but ‘maximizing’, that’s a big word.
In what areas do you have more to do?
We’re still not number one in global M&A and I think we can be. We’re not number one in the derivatives business. We have small market shares, outside of the US, in almost every market except Mexico. There’s enormous potential to grow market share, outside of the US in particular. We have this enormous geographic advantage.
Do you think that it matters that there are people, like yourself, at the top of the CIB structure who don’t have an investment banking background?
I have been in this business a long time and understand investment banking extremely well. Michael Klein, who runs the banking division, is an investment banker by trade. Tom Maheras, who runs capital markets, was never an investment banker but is an expert in capital markets and understands all facets of the business extremely well. Bob Morse, who runs Asia, has an investment banking background. Bill Mills, who runs EMEA, is an investment banker. We have lots of people with an investment banking background.
