Financial Markets and Institutions (F403) Class Assignment

History of Citibank N. A.

Citibank is the consumer banking subsidiary of Citigroup, one of the largest and most well-known global financial service providers. Citibank has retail banking operations in more than 100 countries and territories around the world, with over 200 million customer accounts. In addition to the standard banking transactions, Citibank offers insurance, credit card and investment products. Citibank N.A. is a subsidiary organization that is the original Citibank running operations in the New York and Tri-State area and the parent company of the other subsidiaries. History of Citibank:

On June 16, 1812, with $2 million of capital, City Bank of New York opened for business in New York City. In 1863, the bank became The National City Bank of New York. By 1868, it was considered one of the largest banks in the United States, and in 1897, it became the first major U.S. bank to establish a foreign department. National City became the first U.S. national bank to open an overseas banking office when its branch in Buenos Aires, Argentina, was opened in 1914. In 1918, the International Banking Corporation - a company chartered to conduct banking business outside the U.S., at that time an activity forbidden to U.S. national banks - became a wholly owned subsidiary and was subsequently merged into the bank, thereby giving Citibank historical footholds in London, Shanghai, Calcutta and elsewhere. By 1919, the bank had become the first U.S. bank to have US$1 billion in assets.

Following its merger with the First National Bank, the bank changed its name to The First National City Bank of New York in 1955, and then shortened it to First National City Bank in 1962. The introduced of USD certificates of deposit in London - the first new negotiable instrument in market since 1888. Later to become part of MasterCard, the bank also introduced its First National City Charge Service credit card popularly known as the "Everything Card" in 1967. 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. In 1976, First National City Bank (and its holding company First National City Corporation) was renamed Citibank, N.A. (and Citicorp, respectively). The bank had created its own "one-bank holding company" and had become a wholly-owned subsidiary of that company, Citicorp. Shortly afterward, the bank launched the Citicard, 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. Citibank became 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 Citicard 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 1998, all Citicorp divisions merged with all divisions of Travelers Group to form Citigroup Inc. Citibank continues as a strong brand under the Citigroup umbrella. Recent Events: Citi reported losing $811 billion several days after Merrill Lynch announced that it too had been losing billions from the subprime mortgage crisis in the United States. On November 23, 2008, Citigroup was forced to seek federal financing to avoid a collapse, in a way similar to its colleagues Bear Stearns and AIG. The U.S. government provided $25 billion and guarantees to risky assets to Citigroup in exchange for stock, making it the largest shareholder (36% ownership) of the company. On January 16, 2009, Citigroup announced that it was splitting into two companies. Citicorp will continue with the traditional banking business (which includes Citibank N.A.) while Citi Holdings Inc. will own the more risky investments, some of which will be sold to strengthen the balance sheet of the core business, Citicorp. The idea behind splitting into two companies is so Citigroup can dump "the dead weight" on Citi Holdings, allowing the prime assets of Citicorp to operate away from that of the toxic assets.

Sources: http://www.citigroup.com/citi/corporate/history/citibank.htm http://en.wikipedia.org/wiki/Citibank