Citi’s regional renaissance rests on Brazil
Citigroup is pinning its global strategy on the emerging markets and holds high hopes for its Latin America business. But, right now, it is nowhere near what it could and should be. Rob Dwyer reports from New York and São Paulo.
AS CITI’S SENIOR executives are keen to point out, the US bank has been in Latin America for a long time. It entered the region in 1904 to finance the construction of the Panama Canal and subsequently developed activities throughout the region. The bank now averages more than 80 years of activity in most of the 23 countries in which it operates regionally. But despite this operational legacy, Latin America is very much one of Citi’s bets for the future. One of the central planks of the strategy of Vikram Pandit, Citi’s chief executive since December 2007, for the bank’s post-2008 crisis rehabilitation is to align its growth with the growth of the emerging markets. The chart on page 258 is possibly familiar to readers – it’s a Pandit marketing staple that is designed to say: "Look at the new world. Look at Citi’s global footprint. Now draw your own conclusions."
The underlying message here is about the power of potential. Asia and Latin America will be the drivers of future growth. That’s probably unfair to Latin America’s recent growth: the region now accounts for 20% of total Citicorp revenues and 23% of net income.