Oligopoly brief: Citigroup
Started as City Bank of New York in 1812, Citigroup has grown to be the #1 financial services company in the world, with operations in over 100 countries, making it the most global bank of all.
Commercial banking is still at the core of the company, and its Citibank division has over 3,000 US branches, and over 1,500 international branches. But the company is one of the top players in stockbroking, insurance, mortgages, asset management, commercial and consumer lending, investment banking, private banking, and credit cards.
Citigroup's rise is the result of a long and incredibly complex history of mergers and acquisitions. The four key components of the company are Citibank itself, Commercial Credit, Travelers Insurance, and Solomon Smith Barney, the stockbroker and investment banker.
Each of these entities has a complex and long-term history, The company made of those four companies, since the big merger of Primerica and Citibank in 1998, has been a steady buyer of new properties in all areas of financial services and across the world. That has complemented a strong push for organic growth in all segments.
Citibank grew from being the biggest NY bank to being the largest bank holding company in the US (with holdings over a trillion dollars) when it purchased a number of bank holding companies across the country in the 1980s.
Smith Barney has its origins in two stockbroking firm started in the nineteenth century It was acquired in 1987 by Primerica, a financial services company, formed from Commercial Credit company (a lending company founded in 1912).. In 1993, Primerica combined Smith Barney with the stockbrokerage assets of Shearson Lehman Brothers (purchased from American Express).
In the same year, Primerica acquired Travelers Insurance (founded in 1863) and changed the company name to the Travelers Group. . Salomon Brothers as founded in 1912 as an investment bank. It was acquired in 1997, to form Salomon Smith Barney. Finally in 1998 Citibank and the Travelers Group combined to form Citigroup.
Citigroup has also sold off assets, most notably the property casualty business of Travelers Insurance, which has eventually bought out by St, Paul, another casualty insurer.
Citigroup's status as the #1 world bank has been challenged by the UFJ/Mitsubishi bank merger in Japan. However, those banks can't match the scope of Citi's international reach. In terms of domestic acquisitions, it has been relatively quiet, especially when US rivals Bank of America and J.P. Morgan Chase have managed some major purchases in the past year. It's not hard to imagine taht Citigroup, having digested its many purchases over the last decade, will soon make a big deal.
Some Citigroup divisions
| Citigroup divisions |
Notes |
| Citicards |
Citibank is a leader in issuing credit cards (Visa, MasterCard) both nationally and internationally |
| Diners Club International |
credit card company |
| Citi Commerce Solutions |
credit card processing, was Associated First Capital Group |
| Citigroup Private Bank |
largest private banking business in the world |
| Citigroup Venture Capital |
owns such companies as container-maker Hoover Materials Handling and auto parts maker Remy International |
| CitiFinancial |
coomercial and consumer loans, started life as Commercial Credit |
| CitiMortgage |
the #8 US residential mortgage company by size |
| The Associates |
commercial loans, oil company credit cards |
| Travelers Life & Annuity |
a major US life insurance provider |
| CitiInsurance |
the international arm of Travelers Insurance |
| Primerica Financial Services |
insurance, mutual funds, and banking |
| Banamex |
Mexico's largest commercial bank with over 1,500 branches |
| Salomon Smith Barney |
broker/asset manager, over $1 trillion in client assets |
Recent acquisition timeline
1993
Primerica buys Travelers
Primerica buys broker/asset management company Shearson Lehman from American Express and combines it with Smith Barney
1997
Travelers acquires Salomon Corp, merged to form Salomon Smith Barney
Travelers buys Security Pacific from Bank of America
1998
Citicorp merges with Travelers Insurance to form Citicorp
Buys AT&T's credit card operations
Travelers Buys Aetna Insurance's property and casualty business
1999
Acquires Financiero Atlas, the #2 mortgage lender in Chile
Buys Long-Term Credit Bank of Japan (Shinsei Bank), the first foreign company to own a Japanese bank
Buys IMC Bank, a US subprime mortgage company
Buys Source One, another US subprime mortgage company
Buys credit card operations of Mellon Bank
2000
Acquires the Associates Capital Group, a specialty US-based lender with extensive Japanese dealings. That company had recently purchased AVCO Financial Services in 1999.
Acquires Canada Trust Master Card business from TD Bank
Buys Copelco, a Japanese specialty leasing and small-business finance company in Japan
Salomon Smith Barney acquires European investment banker Schroeders PLC
Salomon Smith Barney acquires the Geneva Group, a major US financial advisory group
Salomon Smith Barney acquires HSBC's Australian stockbroking business
Acquires Bank Handlowy w Warszawie, to form Poland's #1 bank
Buys Siembra Group, an Argentine pension company
Buys Afore Garante, a Mexican pension company
Buys Financiero Atlas, a Chilean consumer finance company
Acquires the Hungarian banking operations of ING Bank
Acquires Associates First Capital Corporation, the fifth-largest consumer finance company in Japan
Acquires People's Bank (United Kingdom) credit card operations
Buys Winter Capital International, a US asset management firm
2001
Buys European American Bank (US) from ABN Amro
Buys Mexico's Grupo Financiero Banamex-Accival, renames it Grupo Financiero Banamex. This is the largest financial sector deal ever in Latin America.
Acquires Kenyan business from ABN AMRO Bank.
Buys 50% of Nikko Trust and Banking, Japan
2002
Buys Golden State Bancorp, parent company of First Nationwide Mortgage and Cal Fed, second-largest U.S. thrift institute
2003
Acquires Sears credit-card business
Buys US-based Forum Financial Group, a service provider to mutual fund and hedge funds
2004
Acquires Washington Mutual Finance Corporation, a major mortgage lender
Buys Principal Residential Mortgages (US), an independent mortgage company
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