Citigroup
Citigroup Inc., commonly known as Citi, is a prominent American multinational banking and financial services corporation headquartered in New York City. Established in 1998 through the historic merger of Citicorp and Travelers Group, Citi has roots dating back to the City Bank of New York, which was founded in 1812. This merger, valued at $70 billion, created one of the largest financial institutions globally, boasting approximately $700 billion in assets. Throughout the early 2000s, Citigroup expanded its global reach, acquiring various financial entities across Europe, Asia, and Latin America, ultimately serving around 200 million customers in over 160 countries by the 2010s.
However, the late 2000s global financial recession severely impacted the corporation, leading to substantial financial losses and necessitating a significant federal bailout of over $476 billion to avert bankruptcy. Despite these challenges, Citigroup recovered, repositioning itself as a leading financial management firm. It made history in 2021 when Jane Fraser became the first female CEO of a major U.S. bank. Recently, the company has undertaken strategic withdrawals from certain international markets to stabilize its revenue, reflecting its ongoing efforts to adapt to global economic conditions while maintaining a workforce of nearly 240,000 employees.
Citigroup
- Date Founded: 1812
- Industry: Banking, financial services
- Corporate Headquarters: New York, New York
- Type: Public
Overview
Citigroup, known as Citigroup Inc., or simply Citi, is an American multinational banking and financial services corporation headquartered in New York City. It was formed in 1998 from a merger of the banking corporation Citicorp and the insurance company Travelers Group. The oldest institution in the bank's history is the City Bank of New York, founded in 1812. Citigroup expanded globally in the early twenty-first century, eventually bringing its services in consumer, corporate, and investment banking to hundreds of millions of customers worldwide.
The merger in which Travelers Group purchased all of Citicorp’s shares to form Citigroup Inc. was the largest corporate merger in history at the time, valued at $70 billion. The deal combined resources from both smaller entities to create about $700 billion in assets for the new Citigroup. With this capital, Citigroup began growing internationally in the early 2000s, acquiring or merging with financial institutions in Europe, Asia, Central America, and South America. This expansion made Citigroup one of the largest financial management corporations in the world. The global economic recession of the late 2000s, however, dealt a damaging blow to Citigroup. The corporation took heavy financial losses and nearly became bankrupt. Ultimately, the federal government saved Citigroup from failure with more than $476 billion in bailout funding. Citigroup eventually recovered from this major downturn and reclaimed its former prestige as one of the most prominent and successful wealth management firms in the world. In the 2010s, Citigroup served about 200 million customers in more than 160 countries, and by the mid-2020s, the company's assets exceeded $2.4 trillion.
History
Citicorp and Travelers Group were each successful enterprises in their own rights before merging to form Citigroup in 1998. Citicorp had been the holding company of Citibank, which had been established in 1812 as the City Bank of New York. It had been set up by New York merchants who hoped that having such a financial institution in their city would help bolster commerce there.
The bank grew quickly over the next century and eventually changed its name to the National City Bank of New York. It built up substantial resources from sound lending practices and invested in important American industries such as coal mining, ironworks, railroads, and shipping.
The National City Bank of New York started maintaining foreign branches in the late nineteenth century and continued growing these international interests in the twentieth century. In 1974, the bank’s holding company became known as Citicorp. In 1976, the bank itself changed its name to Citibank.
By the early 1990s, executives of the insurance company Travelers Group had become interested in acquiring Citicorp. Travelers was founded by James G. Batterson in Hartford, Connecticut, in 1864. Under his leadership, the company quickly proved efficient at providing Americans with quality life, accident, and property insurance. It grew and modernized into the twentieth century until it became one of the most successful insurance companies in the United States.
Travelers Group was acquired by businessman Sandy Weill, former president of American Express, in the early 1990s. At the time, Weill sought to merge several of his business interests together, and Citicorp, as the largest bank holding company in the world, had attracted his interest for some time.
In 1998, Travelers Group purchased all of Citicorp’s market shares for $70 billion, the most expensive corporate merger ever brokered to that point. The new entity would be known as Citigroup Inc., which, with assets worth $700 billion, thereby became the world's largest financial management corporation.
In the early twenty-first century, with Weill serving as chairman and chief executive officer (CEO), Citigroup began strengthening its global presence. The corporation increased its European standing, for instance, by buying one of the oldest investment banks in the United Kingdom. Over the next few years, Citigroup expanded into a diverse array of countries that included Mexico, Chile, Poland, South Korea, Turkey, China, and various nations in Central America. This nearly unrestrained success was not to last, however. Reckless lending and other financial practices across America and world banks in the late 2000s eventually caused a global financial recession that forced numerous banks and other such institutions into bankruptcy and threatened the same fate of many more.
Citigroup was one of the hardest-hit American banks in the crisis. By late 2008, its stock price had fallen by 60 percent, and it had laid off tens of thousands of employees. The US federal government, however, intervened to prevent Citigroup from going bankrupt. It did this because the demise of Citigroup (and a number of other banks) would likely have been financially catastrophic for hundreds of millions of banking customers as well as for the global economy. Therefore, the federal government bailed Citigroup out of its financial adversity with a series of loans totaling $476.2 billion. The corporation repaid these loans over the next several years and emerged from its bailout in the 2010s, showing new profitability. Throughout the 2010s, the company expanded its credit card and banking services globally.
In 2021, Citigroup made history as Jane Fraser became the first female CEO of a major US bank. In the 2020s, the bank remained one of the largest in the United States, with more than 100 million customers and $4 trillion in financial flows. However, it experienced a drop in revenue as it planned to exit services in thirteen international markets in 2021. This trend continued into 2022, as the company further withdrew from international markets in an attempt to regain lost revenues. As Russia invaded Ukraine and Citi withdrew from the Russian market, the company was reported to have lost as much as $3 billion due to the exit.
In 2023, US bank regulators fined Citigroup $136 million for failing to address longstanding data management issues identified in 2020. Later in the same year, the Consumer Financial Protection Bureau ordered Citigroup to pay $24.5 million in fines and $1.4 million in restitution to Armenian Americans. The bureau found that the bank illegally discriminated against these individuals by unjustly denying them credit cards between 2015 and 2021. In early 2024 and again in early 2025, Citigroup laid off employees as part of a corporate overhaul.
In the 2020s, the company employed around 239,000 individuals in 180 countries.
Impact
The mid-2010s saw Citigroup fall from its position as the largest financial services institution in the world, despite remaining among the top four US banks by assets. Though Citigroup had existed in its current form only since 1998, the Citi brand had been building its trust with the global public since the nineteenth century and, by the twenty-first century, was serving hundreds of millions of people across every inhabited continent on earth.
Bibliography
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