Citigroup Inc. or Citi is an
American multinational financial services corporation headquartered in
Manhattan, New York City,
New York, United States. Citigroup was formed from one of the world's largest mergers in history by combining the banking giant Citicorp and financial conglomerate
Travelers Group in
October 1998 (announced on April 7,
1998). The year
2012 marked Citi's 200th anniversary. It is currently the third largest bank holding company in the
United States by assets. Its largest shareholders include funds from the
Middle East and
Singapore.
Citigroup has the world's largest financial services network, spanning
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.[7][8] It also holds over
200 million customer accounts in more than 140 countries. It is one of the primary dealers in
US Treasury securities.[9] According to Forbes, at its height Citigroup used to be the largest company and bank in the world by total assets with 357,000 employees until the global financial crisis of 2008.[10]
Today it is ranked
20th in size under the
Fortune 500 list. In comparison,
JPMorgan Chase, which is ranked
16th on the Fortune 500, is now the largest bank in
U.S. as of 2012.[11]
Citigroup suffered huge losses during the global financial crisis of 2008 and was rescued in
November 2008 in a massive stimulus package by the
U.S. government.[12] On
February 27, 2009, Citigroup announced that the
United States government would take a 36% equity stake in the company by converting
US$25 billion in emergency aid into common shares with a
US Treasury credit line of $45 billion to prevent the bankruptcy of the largest bank in the world at the time.[13]
The government would also guarantee losses on more than $
300 billion troubled assets and inject $20 billion immediately into the company. In exchange, the salary of the
CEO is $1 per year and the highest salary of employees is restricted to $
500,000 in cash and any amount above $500,000 must be paid with restricted stock that cannot be sold until the emergency government aid is repaid in full.[14]
The US government also gains control of half the seats in the
Board of Directors, and the senior management is subjected to removal by the
US government if there is poor performance. By
December 2009, the US government stake was reduced to 27% majority stake from a 36% majority stake after Citigroup sold $21 billion of common shares and equity in the largest single share sale in
US history, surpassing
Bank of America's $19 billion share sale one month prior.
Eventually by
December 2010, Citigroup repaid the emergency aid in full and the US government received an additional $12 billion profit in selling its shares.[15][16][17][18][19]
US Government restrictions on pay and oversight of the senior management were removed after the US government sold its remaining 27% stake as of December 2010.
Despite huge losses during the global financial crisis, Citigroup built up an enormous cash reserve in the wake of the financial crisis with $420 billion in surplus liquid cash and government securities as of June 2012.[20]
As of Q1 2012, Citi has tier 1 capital ratio of 12.4%, making one of the best-capitalized financial institutions in the world after billions of dollars in losses from the financial crisis.[21] This was a result of selling more than $500 billion of its special assets placed in
Citi Holdings, which were guaranteed from losses by the US Treasury while under federal majority ownership
.[22] Additionally, according to the
Washington Post, a special
IRS tax exception given to Citi to allow the US Treasury to sell its shares at a profit while it still owned Citigroup shares, which eventually netted $12 billion. According to
Treasury spokeswoman Nayyera Haq, "This (IRS tax) rule was designed to stop corporate raiders from using loss corporations to evade taxes, and was never intended to address the unprecedented situation where the government owned shares in banks. And it was certainly not written to prevent the government from selling its shares for a profit."[23]
Citigroup is one of the
Big Four banks in the United States, along with Bank of America,
JP Morgan Chase and
Wells Fargo.
http://en.wikipedia.org/wiki/Citigroup
- published: 05 Sep 2013
- views: 1843