The Unstable and Rich History of Citigroup

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Citigroup has a long, unstable and rich history, they were founded in June 16, 1812 the bank was originally called The City Bank of New York. Samuel Osgood was elected as the first President of the company. October 9, 1998, Citigroup was formed following the 140 billion dollar merger of The City Bank of New York or commonly known as Citicorp and Travelers Group this created the world's largest financial services organization. (Martin, Mitchell). Citigroup has the world's largest financial services network, spanning to 140 countries with approximately 16,000 offices worldwide. The company currently employs approximately 260,000 staff around the world, which is down from 267,150 in 2010, according to Forbes. (Global 500). The company has faced a good amount of scandals in the past like the Standard Oil-dominated which involved the Secretary of the Treasury. Treasury bond, trading bond, many different financial scandals that were cause because of a poor purchase of Salomon Brothers which Citigroup later abandoned in 2003, foreclosure scandal and far too many scandal that messed up the company’s reputation. (Chittum, Ryan). They also run into government issues such as bankruptcy three times and getting taken over by the United States Government who bailed them out of bankruptcy. (Chittum, Ryan). They did launch a mobile phone banking service or application in 2008. (Chittum, Ryan). They bought out Primerica so they can to sell life insurance, Salomon Brothers which was a major bond dealer and investment bank, European American Bank, Banamex and many other acquisitions. (Chittum, Ryan). In 2012 Citigroup agreed to pay 2.2 billion dollars to pay the portion of a settlement with the banking industry for their massive foreclosure scandal. As for their current position they are working on recovering the companies name and to show people that the company has changed. Citigroup has about 157 billion dollars’ worth of legacy assets, and Citi has been in a cost cutting drive since the financial crisis. They also said they are going to cut 11,000 job cuts, in 2013. This just adds to the thousands of people they already let go since 2008. Basely the company has to do a lot of work, but the bright side is they have a new CEO, and "The good news is we looked at the fundamental drivers of the business. Our operating revenue, expenses…all things heading in the right direction," this was said by the CEO Michael Corbat (Ahmed, Shai). A Legacy assets is “an asset that has been in a company for such a long time that it actually has lost its original value, it's outdated, obsolete or has lost its productivity” (Legacy Asset). Citigroup plans to cut bonus by 10%, and the main thing is the CEO is not going to get paid his 15 million dollar pay package. This was voted by the shareholders, and not by the company, but the bright side is that the company is up 34% o share. (Farrell, Maureen). When you take a look at Citigroup’s balance sheet and income statement for the past three or five years we see that the company is making a profit compare to 2009 where they were losing about 15 billion dollars as seen in graph 1.4 and in the second graph. But then when you look at the next year the come did make more money, but in the past year of 2012 they lost money where they start at 3 billion, but went down to 2 billion. The reason why I think they did this is because they paid a good amount of money for settlements they did in 2012. The company’s total assets went down a big amount in 2009, and since then they did not get to the 2 trillion dollar mark has they were there in the past. One key thing that Citigroup is doing right is lowering their total liabilities. The main thing for them is gaining value in total stockholder equity every year since 2009 (Balance Sheet | Citigroup, Inc.). The reason why this is important because, is in 2008 stocks for Citigroup was 200 dollars per share, and then in 2009 the stock went as low as 10 cents. Till this day the...
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