Page 1 of 9

CITI BANK PAKISTAN

FOR THE SUBJECT
BUSINESS STRATEGY

SR.# NAME ROLL NO. #
1. HAMZA MEHMOOD 2113156
2. BILAL EHSAN 2113166
3. HASAN HAFEEZ 2113030
4. KHALID KHAN 2113215



SUBMITTED TO
SIR QAYYUM QURESHI
NATIONAL COLEGEE OF BUSINESS ADMINISTRATIONN AND ECONOMICS








Page 2 of 9




ORGANIZATIONAL OVERIEW




Introduction:

Citigroup Inc. is a diversified global financial services holding company whose businesses
provide a broad range of financial services to consumer and corporate customers with some
200 million customer accounts in six continents and more than 100 countries and territories,
dates back to the history of Citibank, which began in 1812; Travelers, since 1864; Smith Barney,
founded in 1873; and Banamex, which was formed in 1884 as a result of the merger of Banco
National Mexican and Banco Mercantile Mexican.
Other major brand names under Citigroup's trademark red umbrella include Citi Cards,
CitiFinancial, CitiMortgage, Citi Insurance, Primerica, Diners Club, Citigroup Global Corporate
and Investment Bank, Citigroup Asset Management, The Citigroup Private Bank and Citi
Capital.
Below are brief descriptions of many of the most significant business activities.












Vision:




Page 3 of 9




To be a unique global bank and the leading regional consumer bank across Asia Pacific and
Middle East dedicated to our customers, financially strong, consistent committed to the staff and
their development, and delivering sustained superior performance.


Citigroup Global Investment Management:

Citigroup Asset Management provides investment management and related services to a broad
spectrum of clients around the world, from beginning investors to wealthy individuals to large
institutions, both public and private. It boasts one of the most impressive research teams on
Wall Street and some of the most well-known brands in money management - Smith Barney,
Salomon Brothers and Citibank. The Citigroup Private Bank offers boutique service to its
clientele while, at the same time, being backed by the full power of Citigroup. With offices in 59
cities around the world, it is one of the world's most global private banks. Global Retirement
Services provides for the retirement and pension needs of clients around the world.


Citigroup International:
Citigroup, principally through Citibank, has a long and unrivaled history as a provider of financial
services throughout the world. Its global footprint includes more than 100 countries in North and
South America; Asia and the Pacific; Western, Central, and Eastern Europe; the Middle East;
and Africa. It offers customers personal service and the advantages of a local bank, while its
global platform allows introducing a continuous stream of new and innovative products quickly
and more cost-effectively than competitors.



Citibank in Pakistan:
Citigroup started its activities in Pakistan in July 22, 1961 by establishing Citibank in Karachi.
Now it operates in 6-major cities of Pakistan such as Karachi (2 branches), Lahore (1 branch),
Faisalabad (1 branch), Islamabad, (1 branch) and, Rawalpindi (1 branch) with its seven
branches. Citibank Islamabad involves in:



Page 4 of 9




*Corporate banking *Consumer banking.
Businesses:

With over 1000 employees in Pakistan, they operate through two major business lines; their
Global Consumer Group and Institutional Clients Group, providing a variety of services to more
than 200,000 consumer and corporate clients respectively.
Citi Pakistan has a network of 26 branches across Karachi, Hyderabad, Islamabad, Rawalpindi,
Lahore, Faisalabad, Multan, Sialkot, Gujranwala and Jhelum


Mission Statement

Money isn't everything, but it can turn your dreams into reality. And the wide range of products





ORGANIZATIONAL HIERARCHY


Organization management chart:




Page 5 of 9








Citibank Business Strategy

Vision

Become the worlds leading business enabler
Aims

CEO
REGIONAL
MANAGER
BRANCH
MANAGER
BRANCH
MANAGER
REGIONAL
MANAGER
BRANCH
MANAGER
BRANCH
MANAGER
REGIONAL
MANAGER
BRANCH
MANAGER
BRANCH
MANAGER
EXECUTIVE
DIRETORS
Manager
Coordinator
TSO
BRO BRO
TSO
BRO BRO
TSO
BRO BRO



Page 6 of 9




1. Empower local, regional and global customers
2. Help them take advantage of the efficiencies and opportunities created by ecommerce.

Citibanks Business Strategy
Connect
Transform
Extend

Product development

Citibank aimed to use credit card business to
Acquire new customers (Card members)
Target new customers outside its branch business
Cross-sell other Citibank products and services







Problem Statement

Given the goals, should Citibanks Asia Pacific consumer bank launch the credit card business
If they go launch credit cards, which countries should they go for?
In the launch scenario, what should be the positioning and pricing strategy in each countries?
Where the launch is taking place

Analysis of Business case for credit cards

Citibanks Asia Pacific Consumer bank expects to increase its earnings by $30 million over two
years. Assuming the bank retains its current profitability ratio, it is expected to increase its
revenue by 90.8 million over next 2 years.



Page 7 of 9




Given the distribution limitations imposed on foreign banks in Asia Pacific region, it is unlikely
that Citibank would be able to increase the revenue by $90 million through their current
consumer banking operations. Hence Citibank must launch new products to generate additional
revenue stream.
Looking at the low penetration of Credit cards (Exhibit 8 of the case) and high growth rates
(Exhibit 4 of the case) of Asia Pacific countries, Citibank has a great opportunity to launch Credit
card business to generate the additional revenue and profits.

Automated banking card

Shortly afterward, the bank launched the Citi card, which allowed customers to perform all
transactions without a passbook. Branches also had terminals with simple one line displays that
allowed customers to get basic account information without a bank teller. When automatic teller
machines were later introduced, customers could use their existing Citi card.




Credit card business

In the 1960s the bank entered into the credit card business. In 1965, First National City Bank
bought Carte Blanche from Hilton Hotels. However after three years, the bank (under pressure
from the U.S. government) was forced to sell this division. By 1968, the company created its
own credit card. The card, known as "The Everything Card," was promoted as a kind of East
Coast version of the Bank America. By 1969, First National City Bank decided that the
Everything Card was too costly to promote as an independent brand and joined Master Charge
(now MasterCard). Citibank unsuccessfully tried again in 19771987 to create a separate credit
card brand, the Choice Card.
John S. Reed was selected CEO in 1984, and Citi became a founding member of the CHAPS
clearing house in London. Under his leadership, the next 14 years would see Citibank become
the largest bank in the United States, the largest issuer of credit cards and charge cards in the
world, and expand its global reach to over 90 countries.[8]
As the bank's expansion continued, the Narre Warren-Caroline Springs credit card company
was purchased in 1981. In 1981, Citibank chartered a South Dakota subsidiary to take
advantage of new laws that raised the state's maximum permissible interest rate on loans to 25
percent (then the highest in the nation). In many other states, usury laws prevented banks from



Page 8 of 9




charging interest that aligned with the extremely high costs of lending money in the late 1970s
and early 1980s, making consumer lending unprofitable.

Automatic teller machines

Citibank was one of the first U.S. banks to introduce automatic teller machines in the 1970s, in
order to give 24-hour access to accounts. Customers could use their existing Citi card in this
machine to withdraw cash and make deposits, and were already accustomed to using a
machine with a card to get information that previously required a teller.
In April 2006, Citibank struck a deal with 7-Eleven to put its automated teller machine (ATMs) in
more than 5,500 convenience stores in the U.S. In the same month, it also announced it would
sell all of its Buffalo and Rochester New York branches and accounts to M&T Bank.



FACTORS INVOLVE IN OPREATION CLOSE DOWN

It is the end of an era, it seems. Citibank, the institution that revolutionized consumer banking in Pakistan
and gave it the face that we know today, is shutting down its consumer banking division in Pakistan.

Both source inside the bank itself as well as the banking industry as a whole, insist that Citi is
shutting down its consumer banking division in Pakistan to focus on corporate and institutional
clients. The bank has only 11 branches in Pakistan, but has been very successful in developing
the consumer banking market in the country and has a very strong presence in the corporate
and investment banking space, particularly among clients looking to execute cross-border deals.
Citi, along with Standard Chartered, is the go-to bank for anyone who wants to execute any
kind of large cross-border investment banking transaction in Pakistan, said one banker based in
Karachi who wished to remain anonymous.
Citi already exited its consumer lending portfolio by selling off most of its business to a local
bank in 2009. It appears that the bank is now looking to cut the final links to the consumer
finance market altogether by selling off its branch network and deposits. It is unclear whether
Citibank has yet found a buyer for that network.
As of September 30, 2011 the latest available figures Citibank Pakistan had about Rs70
billion in deposits and a total asset book of about Rs96.4 billion ($1.1 billion). Yet the
overwhelming bulk of those deposits are large corporations and multinationals.



Page 9 of 9




As for the banks lending portfolio, it has become heavily skewed towards government securities
with almost half of its assets parked in short and long term treasury bills. Corporate lending
accounts for only about 20% of the banks total asset book.
The strategy has been remarkably profitable for Citibank, which has seen its net income jump
391% to reach Rs1.7 billion for the first nine months of 2011, compared to the same period in
the previous year. The bank is on target to beat its nominal record earnings of Rs2 billion that it
achieved in 2004.
Yet it appears that the bank sees no real growth prospects in the Pakistani market for itself.
Standard Chartered has all but cornered the market for multinational corporations and large
local companies, the bread and butter of Citis corporate clientele in the past.
Citibank also appears to have lost a lot of interest in its international retail banking and has been
cutting back its global branch network for the past five years. In 2008, for instance, the bank sold
off its 340 branches in Germany for 5.2 billion ($7.7 billion) to Frances Credit Mutual. Even that
division had been highly profitable, earning $573.3 million in 2007 off an asset base of $1.5
billion.
The bankers at Standard Chartered are likely to be excited at the news that Citibank is closing
off its retail business. While Citi may plan on retaining much of its corporate clients, a significant
number of them are nonetheless expected to migrate to Standard Chartered, the bank that has
been operating in what is now Pakistan since 1863 and does not seem to have any intention of
leaving any time soon.
Standard Chartered seems to finally be reaping the benefits of having acquired Union Bank in
2006, which has given it a larger local branch network than any other foreign bank in the
country. As a result of that acquisition, it also became the only foreign bank to be listed on the
Karachi Stock Exchange.
It is essentially a local foreign bank, said one finance professional in Karachi who wished to
remain anonymous.
Standard Chartered has a large branch network that allows it to sustain a presence in the
Pakistani market independent of any international business it might get through referrals from its
offices in London, Hong Kong or New York. Sources inside the bank say it has quietly become
the bank of choice for international corporations looking to do deals in Pakistan, largely because
it has a large enough presence to execute complex transactions.
Citibank, HSBC and JPMorgan all have investment banking divisions in Pakistan, but are very
small and have even smaller asset books to back them up. By contrast, Standard Chartered
has Rs353 billion in assets and over 200 branches in Pakistan