Citi Retail Arm Targets Affluent Americans

Citigroup is to target wealthy US consumers in big cities with a revamped offering of accounts and credit cards, in the latest attempt to revive its North American retail bank.

Mark Lennihan

The strategy, spearheaded by Manuel Medina-Mora, the unit’s chief, is a recognition that Citi needs to scrap its focus on the mass market in the US and cater for the richer customers it serves in its overseas operations. Citi has long been under pressure to improve the performance of the US retail bank, which is smaller and less profitable than competitors such as Bank of America, JPMorgan Chase and Wells Fargo.

In an internal memo sent to staff on Wednesday, Mr Medina-Mora, a Mexico-born banker who heads Citi’s Latin America business, said the bank would take “best practices and products from around the world and implement them in the US”.

Under Mr Medina-Mora’s plan, Citi will roll out its Citigold account, the flagship product of its international operations aimed at the affluent, in the US.

Unlike the no-frills accounts offered to US customers, Citigold aims to be a one-stop shop with a more personalised service and a wider offering of financial products. It often requires customers to hold a higher minimum balance than traditional accounts.

Mr Medina-Mora’s memo, which was obtained by the Financial Times, said Citi would overhaul its credit card offering and strengthen links between its commercial and retail units to cross-sell more products.

The document did not deal with Citi’s 1,000-strong branch network in the US, but executives have indicated the bank will close outlets in areas where it is underrepresented and focus on larger urban centres.

In an interview with the Financial Times in March, Vikram Pandit, Citi’s chief executive, said the “sweet spot” of the group’s retail operations would be in 100-plus global cities.

Citi’s North America consumer unit had profits of $84m in the first six months of 2010, an 83 per cent fall from the same period last year, although revenues recorded a 60 per cent year-on-year rise to $7.5bn.

The US retail bank accounts for a small part of Citi’s profits and Mr Pandit has repeatedly said the group’s future growth would come from outside the US. But the US consumer business holds about half of its total retail deposits, and its presence on US main streets is important for Citi’s image.

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