Citigroup was formed on October 8, 1998, by the merger of Citicorp, the
bank holding company for
Citibank, and
Travelers. At the time, it was the world's largest financial services organization.
Citicorp (1812–1985) Citibank (formerly City Bank of New York) was chartered by the
State of New York on June 16, 1812, with $2 million (~$ in ) of capital. Serving a group of New York
merchants, the bank opened for business on September 14 of that year, and
Samuel Osgood was elected as the first president of the company. although the bank had been active in plantation economies, such as the Cuban sugar industry, since the mid-19th century. The purchase of U.S. overseas bank International Banking Corporation in 1918 helped it become the first American bank to surpass $1 billion in assets. During the
United States occupation of Haiti and the bank's income from Haiti's loan debt related to the
Haiti indemnity controversy, the bank earned some of its largest gains in the 1920s due to debt payments from Haiti, becoming the largest commercial bank in the world in 1929. As it grew, the bank became an innovator in financial services, becoming the first major U.S. bank to offer
compound interest on
savings (1921);
unsecured personal loans (1928); customer
checking accounts (1936) and the negotiable
certificate of deposit (1961). In 1974, under the leadership of CEO
Walter B. Wriston, First National City Corporation changed its formal name to "Citicorp", with First National City Bank being formally renamed Citibank in 1976.
Travelers Group (1986–2007) Travelers Group, at the time of the merger, was a diverse group of financial concerns that had been brought together under CEO
Sandy Weill. Its roots came from Commercial Credit, a subsidiary of
Control Data Corporation that was taken private by Weill in November 1986 after taking charge of the company earlier that year. formed a strategic alliance with Primerica that would lead to its amalgamation into a single company in December 1993. With the acquisition, the group became Travelers Inc. Property & casualty and life & annuities
underwriting capabilities were added to the business. Meanwhile, the distinctive Travelers red umbrella logo, which was also acquired in the deal, was applied to all the businesses within the newly named organization. During this period, Travelers acquired
Shearson Lehman—a retail brokerage and asset management firm that was headed by Weill until 1985 This deal complemented Travelers/
Smith Barney well as Salomon was focused on fixed-income and institutional clients, whereas Smith Barney was strong in equities and retail. Salomon Brothers absorbed Smith Barney into the new securities unit termed Salomon Smith Barney; a year later, the division incorporated Citicorp's former securities operations as well. The Salomon Smith Barney name was abandoned in October 2003 after a series of financial scandals that tarnished the bank's reputation.
Merger of Citicorp and Travelers (1998–2001) On April 6, 1998, Citicorp and Travelers announced a merger. The chairmen of both parent companies,
John S. Reed and
Sandy Weill respectively, were announced as co-chairmen and co-CEOs of the new company, Citigroup, Inc., although the vast difference in management styles between the two immediately presented question marks over the wisdom of such a setup. The remaining provisions of the
Glass–Steagall Act—enacted following the Great Depression—forbade banks to merge with insurance underwriters, and meant Citigroup had between two and five years to divest any prohibited assets. Weill stated at the time of the merger that they believed "that over that time the legislation will change ... we have had enough discussions to believe this will not be a problem".
Joe J. Plumeri worked on the post-merger integration of the two companies and was appointed CEO of Citibank North America by Weill and Reed. He oversaw its network of 450
branches. J. Paul Newsome, an analyst with
CIBC Oppenheimer, said: "He's not the spit-and-polish executive many people expected. He's rough on the edges. But Citibank knows the bank as an institution is in trouble—it can't get away anymore with passive selling—and Plumeri has all the passion to throw a glass of cold water on the bank." Plumeri boosted the unit's earnings from $108 million to $415 million in one year, an increase of nearly 300%. He unexpectedly retired from Citibank in January 2000. which, until 1989, had been owned by
Gulf+Western (now part of
National Amusements), and later by
Ford Motor Credit Company. The Associates was widely criticized for predatory lending practices and Citi eventually settled with the Federal Trade Commission by agreeing to pay $240 million to customers who had been victims of a variety of predatory practices, including "flipping" mortgages, "packing" mortgages with optional credit insurance, and deceptive marketing practices. In 2001, Citigroup made additional acquisitions:
European American Bank, in July, for $1.9 billion, and
Banamex in August, for $12.5 billion.
Spin-off of Travelers (2002) The company spun off its Travelers Property and Casualty insurance underwriting business in 2002. The spin-off was prompted by the insurance unit's drag on Citigroup stock price because Travelers earnings were more seasonal and vulnerable to large disasters and events such as the
September 11 attacks. It was also difficult to sell insurance directly to its customers since most customers were accustomed to purchasing insurance through a broker. Travelers merged with The St. Paul Companies Inc. in 2004 forming The St. Paul Travelers Companies. Citigroup retained the life insurance and annuities underwriting businesses until it sold them to
MetLife in 2005. In spite of divesting Travelers Insurance, Citigroup retained Travelers' signature red umbrella logo as its own until February 2007, when Citigroup agreed to sell the logo back to St. Paul Travelers, which renamed itself
Travelers Companies. Citigroup also decided to adopt the corporate brand "Citi" for itself and virtually all its subsidiaries, except Primerica and Banamex.
Subprime mortgage crisis (2007) Heavy exposure to troubled mortgages in the form of
collateralized debt obligation (CDOs), compounded by poor risk management, led Citigroup into trouble as the
subprime mortgage crisis worsened in 2007. The company had used elaborate mathematical risk models which looked at mortgages in particular geographical areas, but never included the possibility of a national housing downturn or the prospect that millions of mortgage holders would default on their mortgages. Trading head
Thomas Maheras was close friends with senior risk officer David Bushnell, which undermined risk oversight. As Treasury Secretary,
Robert Rubin was said to be influential in lifting the
Glass–Steagall Act that allowed Travelers and Citicorp to merge in 1998. Then on the board of directors of Citigroup, Rubin and Charles Prince were said to be influential in pushing the company towards
MBS and CDOs in the subprime mortgage market. Starting in June 2006, Senior Vice President
Richard M. Bowen III, the chief underwriter of Citigroup's Consumer Lending Group, began warning the board of directors about the extreme risks being taken on by the mortgage operation that could potentially result in massive losses. The group bought and sold $90 billion of residential mortgages annually. Bowen's responsibility was essential to serve as the quality control supervisor ensuring the unit's creditworthiness. When Bowen first became a
whistleblower in 2006, 60% of the mortgages were defective. The number of bad mortgages began increasing throughout 2007 and eventually exceeded 80% of the volume. Many of the mortgages were not only defective but were a result of
mortgage fraud. Bowen attempted to rouse the board via weekly reports and other communications. On November 3, 2007, Bowen emailed Citigroup chairman
Robert Rubin and the bank's
chief financial officer, head auditor, and the chief risk management officer to again expose the risk and potential losses, claiming that the group's internal controls had broken down and requesting an outside investigation of his business unit. The subsequent investigation revealed that the Consumer Lending Group had suffered a breakdown of internal controls since 2005. Despite the findings of the investigation, Bowen's charges were ignored, even though withholding such information from shareholders violated the
Sarbanes–Oxley Act (SOX), which he had pointed out. Citigroup CEO
Charles Prince signed a certification that the bank was in compliance with SOX despite Bowen revealing this wasn't so. Citigroup eventually stripped Bowen of most of his responsibilities and informed him that his physical presence was no longer required at the bank. The Financial Crisis Inquiry Commission asked him to testify about Citigroup's role in the mortgage crisis, and he did so, appearing as one of the first witnesses before the Commission in April 2010. As the crisis began to unfold, Citigroup announced on April 11, 2007, that it would eliminate 17,000 jobs, or about 5% of its workforce, in a broad restructuring designed to cut costs and bolster its long underperforming stock. Even after
securities and
brokerage firm
Bear Stearns ran into serious trouble in summer 2007, Citigroup decided the possibility of trouble with its CDOs was so tiny (less than 1/100 of 1%) that it excluded them from its risk analysis. With the crisis worsening, Citigroup announced on January 7, 2008, that it was considering cutting another 5 percent to 10 percent of its 327,000 member-workforce.
Failed takeover of Nikko Asset Management In 2007, Citigroup acquired 61% of
Nikko Asset Management for $7.7 billion to take majority control in what was then the largest foreign buyout ever of a Japanese company. Citigroup attempted to buy out the remaining shares of Nikko later that year at a cost of $4.6 billion to take full control of the company. Two years later, Citigroup sold its stake to Sumitomo Trust and Banking Co, a subsidiary of
Sumitomo Mitsui Trust Holdings, for $795 million as it retreated from Japan.
Collapse and US government intervention (2008) By July 2008 Citigroup was described as struggling, Shares of Citigroup common stock traded well below $1.00 on the
New York Stock Exchange. As a result, late in the evening on November 23, 2008, Citigroup and Federal regulators approved a plan to stabilize the company and forestall a further deterioration in the company's value. On November 24, 2008, the U.S. government announced a massive bailout for Citigroup designed to rescue the company from bankruptcy while giving the government a major say in its operations. A joint statement by the
US Treasury Department, the
Federal Reserve and the
Federal Deposit Insurance Corporation (FDIC) announced: "With these transactions, the U.S. government is taking the actions necessary to strengthen the financial system and protect U.S. taxpayers and the U.S. economy."
TARP funding Citi received the largest amount of
TARP funding, "a larger bailout than any other U.S. bank." The bailout called for the government to back about $306 billion in loans and securities and directly invest about $20 billion in the company. The Treasury provided $20 billion in
Troubled Asset Relief Program (TARP) funds in addition to $25 billion given in October. The Treasury Department, the Federal Reserve and the FDIC agreed to cover 90% of the losses on Citigroup's $335 billion portfolio after Citigroup absorbed the first $29 billion in losses. The Treasury would assume the first $5 billion in losses; the FDIC would absorb the next $10 billion; then the Federal Reserve would assume the rest of the risk. The assets remained on Citigroup's balance sheet; the technical term for this arrangement is
ring fencing. In return, the bank gave the U.S. Treasury $27 billion of preferred shares and warrants to acquire
common stock. The government obtained wide powers over banking operations. Citigroup agreed to try to modify mortgages, using standards set up by the FDIC after the collapse of
IndyMac Bank, with the goal of keeping as many homeowners as possible in their houses. Executive salaries would be capped. As a condition of the federal assistance, Citigroup's dividend payment was reduced to $0.01 per share. In a
New York Times op-ed, Michael Lewis and David Einhorn described the November 2008 $306 billion (~$ in ) guarantee as "an undisguised gift" without any real crisis motivating it. According to
The Wall Street Journal, the government aid provided to Citi in 2008/2009 was provided to prevent a worldwide chaos and panic by the potential collapse of its Global Transactions Services (now TTS) division. According to the article, former CEO
Pandit said if Citigroup was allowed to unravel into bankruptcy, "100 governments around the world would be trying to figure out how to pay their employees". According to New York Attorney General
Andrew Cuomo, Citigroup paid hundreds of millions of dollars in bonuses to more than 1,038 of its employees after it had received its $45 billion (~$ in ) TARP funds in late 2008. This included 738 employees each receiving $1 million in bonuses, 176 employees each receiving $2 million bonuses, 124 each receiving $3 million in bonuses, and 143 each receiving bonuses of $4 million to more than $10 million. As a result of the criticism and the U.S. Government's majority holding of Citigroup's
common stock, compensation and bonuses were restricted from February 2009 until December 2010. In 2009,
Jane Fraser, the CEO of Citi Private Bank, stopped paying its bankers with a commission for selling investment products, in a move to bolster Citi Private Bank's reputation as an independent wealth management adviser, as opposed to a product pusher.
Creation of Citi Holdings (2009) On January 16, 2009, Citigroup announced its intention to reorganize itself into two operating units: Citicorp for its retail and institutional client business, and Citi Holdings for its brokerage and asset management. Citigroup will continue to operate as a single company for the time being, but Citi Holdings managers will be tasked to "take advantage of value-enhancing disposition and combination opportunities as they emerge", Citi Holdings consists of Citi businesses that Citi wants to sell and are not considered part of Citi's core businesses. The majority of its assets are U.S. mortgages. It was created in the wake of the financial crisis as part of Citi's restructuring plan. It consists of several business entities including remaining interests in local consumer lending such as OneMain Financial, divestitures such as Smith Barney, and a special asset pool. Citi Holdings represents $156 billion of GAAP assets, or ~8% of Citigroup; 59% represents North American mortgages, 18% operating businesses, 13% special asset pool, and 10% categorized as other. Operating businesses include OneMain Financial ($10B), PrimeRe ($7B), MSSB JV ($8B) and Spain / Greece retail ($4B), less associated loan loss reserves. While Citi Holdings is a mixed bag, its primary objective is to wind down some non-core businesses and reduce assets, and strategically "breaking even" in 2015. On February 27, 2009, Citigroup announced that the U.S. government would take a 36%
equity stake in the company by converting US$25 billion in emergency aid into
common stock with a
United States Treasury credit line of $45 billion to prevent the bankruptcy of the company. The government guaranteed losses on more than $300 billion of troubled assets and injected $20 billion immediately into the company. The salary of the CEO was set at $1 per year and the highest salary of employees was restricted to $500,000. Any compensation amount above $500,000 had to be paid with
restricted stock that could not be sold by the employee until the emergency government aid was repaid in full. The U.S. government also gained control of half the seats in the board of directors, and the senior management was subjected to removal by the US government if there were poor performance. By December 2009, the U.S. government stake was reduced from a 36% stake to a 27% stake, after Citigroup sold $21 billion of common shares and equity in the largest single share sale in U.S. history, surpassing Bank of America's $19 billion share sale 1 month prior. By December 2010, Citigroup repaid the emergency aid in full and the U.S. government had made a $12 billion (~$ in ) profit on its investment in the company. Government restrictions on pay and oversight of the senior management were removed after the U.S. government sold its remaining 27% stake in December 2010. On June 1, 2009, it was announced that Citigroup would be removed from the
Dow Jones Industrial Average effective June 8, 2009, due to significant government ownership. Citigroup was replaced by Travelers Co.
Sale of Smith Barney (2009) Smith Barney, Citi's global private wealth management unit, provided brokerage, investment banking and asset management services to corporations, governments and individuals around the world. With over 800 offices worldwide, Smith Barney held 9.6 million domestic client accounts, representing $1.562 trillion in client assets worldwide. On January 13, 2009, Citi announced the merger of Smith Barney with
Morgan Stanley Wealth Management. Citi received $2.7 billion and a 49% interest in the joint venture. In June 2013, Citi sold its remaining 49% stake in Smith Barney to Morgan Stanley Wealth Management for $13.5 billion following an appraisal by Perella Weinberg.
Return to profitability, denationalization (2010) In 2010, Citigroup achieved its first profitable year since 2007. It reported $10.6 billion in net profit, compared with a $1.6 billion loss in 2009. Late in 2010, the government sold its remaining stock holding in the company, yielding an overall net profit to taxpayers of $12 billion (~$ in ). A special IRS tax exception given to Citi allowed 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."
Expansion of retail banking operations (2011) In 2011, Citi was the first bank to introduce digitized Smart Banking branches in Washington, D.C., New York, Tokyo and Busan (South Korea) while it continued renovating its entire branch network. New sales and service centers were also opened in Moscow and St. Petersburg. Citi Express modules, 24-hour service units, were introduced in Colombia. Citi opened additional branches in China, expanding its branch presence to 13 cities in China.
Expansion of credit card operations (2011) Citi Branded Cards introduced several new products in 2011, including: Citi ThankYou, Citi Executive/
AAdvantage and Citi Simplicity cards in the U.S. It also has Latin America partnership cards with Colombia-based airline Avianca and with Banamex and AeroMexico; and a merchant loyalty program in Europe. Citibank is also the first and currently the only international bank to be approved by Chinese regulators to issue credit cards under its own brand without cooperating with Chinese state-owned domestic banks.
Chinese investment banking joint venture (2012) In 2012, the Global Markets division and Orient Securities formed Citi Orient Securities, a Shanghai-based equity and debt brokerage operating in the Chinese market. In January 2019, Citigroup announced that it sold its stake in the business to its Chinese partner.
Federal Reserve stress tests (2012–2016) The company failed the
Comprehensive Capital Analysis and Review stress tests in 2012 due to Citi's high capital return plan and its international loans, which were rated by the Fed to be at higher risk than its domestic American loans. In 2013, Sanjiv Das was replaced as head of CitiMortgage with
Jane Fraser, former head of Citi Private Bank. The company failed the stress tests again in 2014, this time due to qualitative concerns. However, it passed the stress tests in 2015 and in 2016. In February 2016, the company was subject to a $1.1 billion fraud lawsuit filed by lender
Rabobank and other investors as a result of the bankruptcy of Oceanografia SA, a Mexican oil services firm. The plaintiffs claimed that Citigroup conspired with Oceanografia to accept falsified work estimates. The courts found in favor of Citigroup. In April 2016, Citigroup announced that it would eliminate its
bad bank, Citi Holdings.
Spin-off of Napier Park Global Capital (2013) Under the leadership of CEO Michael Corbat, Citi Capital Advisors (CCA), formerly Citi Alternative Investments, was a
hedge fund that offered various investment strategies across multiple asset classes. To comply with the
Volcker Rule, which limits bank ownership in hedge funds to no more than 3%, Citi spun off its hedge fund unit in 2013 and gave a majority of the company to its managers. The spin-off of CCA created Napier Park Global Capital, a $6.8 billion hedge fund with more than 100 employees in New York and London and managed by Jim O'Brien and Jonathan Dorfman.
Downsizing of consumer banking unit (2014) In October 2014, Citigroup announced its exit from consumer banking in 11 markets, including Costa Rica, El Salvador, Guatemala, Nicaragua, Panama, Peru, Japan, Guam, the Czech Republic, Egypt, South Korea (consumer finance only), and Hungary.
2015 onwards In May 2015, the bank announced the sale of its margin foreign exchange business, including
CitiFX Pro and TradeStream, to
FXCM and
SAXO Bank of
Denmark. Despite this deal, industry surveys pegged Citi as the biggest banking player in the forex market. The company's remaining foreign exchange sales & trading businesses continued operating in the wake of this deal under the leadership of James Bindler, who succeeded Jeff Feig as the firm's global head of foreign exchange in 2014. In November 2015,
Springleaf acquired
OneMain Financial from Citigroup. In February 2016, Citi sold its retail and commercial banking operations in Panama and Costa Rica to the
Bank of Nova Scotia (Scotiabank) for $360 million (~$ in ). The operations sold include 27 branches serving approximately 250,000 clients. Citi continues to offer corporate and institutional banking and wealth management in Panama and Costa Rica. On April 1, Citigroup became the exclusive issuer of Costco-branded credit cards. In April 2016, Citi was given regulatory approval for its "living will", its plans to shut down operations in the event of another financial crisis. In response to the
COVID-19 pandemic, Citi provided support to cardholders including waiving late fees. It also announced that some lower paid employees would receive a one-off payment of US$1,000 to help them through the crisis. This was not just limited to the US. In Singapore where Citi had a large operation, low paid staff would receive S$1,200. In August 2020, Citi mistakenly wired $900 million (~$ in ) to the creditors of one of its clients, the American cosmetics corporation
Revlon. Citi sued to get most of the money back but as of June 2022 had been unsuccessful. In October, the same year, Citigroup was fined $400 million by the US bank regulators as a result of its risk in control systems and was ordered to update its technology. The company will have four months to make a new plan and submit it to the Federal Reserve. In November 2023, Citigroup began initiating layoffs as part of a corporate overhaul. The layoffs were part of a restructuring plan announced by CEO Jane Fraser, which includes the formation of five new divisions and the departure of several senior executives. The move was in response to Citigroup's stock performance and increased expenses. The full extent of the job cuts, referred to internally as "Project Bora Bora," were reported to involve a reduction of at least 10% or 20 000 of the workforce in several departments. In 2025, Citigroup agreed to sell its wealth alternatives unit, Citi Global Alternatives, to
iCapital, a New York-based alternative investment solutions firm. Terms of the deal were not disclosed.
Combination of Markets and Securities Services (2019) In 2019, Citi combined its Global Markets and Securities Services business into Markets & Securities Services, which includes broad trading and execution capabilities in addition to
custody, clearing, financing and hedging services.
Shrinking of consumer banking unit (2021–2025) In February 2021,
Jane Fraser, became CEO of the company, the first female CEO of a Big Four bank. In April 2021, Citi announced it would exit its consumer banking operations in 13 markets, including Australia, Bahrain, China, India, Indonesia, South Korea, Malaysia, the Philippines, Poland, Russia, Taiwan, Thailand and Vietnam. In January 2022, it was announced that
UOB would purchase Citi's consumer banking business in Indonesia, Malaysia, Thailand, and Vietnam for approximately $4.9bn. In August 2023, it was announced
DBS Bank had acquired Citi's consumer banking business in Taiwan, Citi Consumer Taiwan, for a total consideration of $706m. Citi will continue to operate its consumer banking businesses in the US, Canada, Europe and in only 4 other markets: Hong Kong, Singapore, London and the UAE across the entire APAC and EMEA regions. In December 2024, Citigroup along with Bank of America announced that they are exiting the Net-Zero Banking Alliance (NZBA). In March 2025, Citigroup seeks to reduce reliance on external IT contractors, cutting their share by 20% to 50%. It intends to hire full-time employees instead, increasing its technology workforce to 50,000. Improved risk management, data governance after regulatory penalties, including a $136 million for data issues, have prompted such measures. A recent $22.9 million fraud case which involved external contractors is also cited by Citigroup as a reason for the shift. The bank intend to reduce its external suppliers from 144 to 50 and plans to shift IT operations from Rutherford, NJ, to Jersey City. The bank’s stock fell 0.7%, accumulating a 4.4% loss for the year.
Involvement in controlling the sale of guns In 2018,
The New York Times reported about Citi's actions, under the direction of CEO
Michael Corbat, to intervene in the matter of gun control. In particular, its credit card policies were set to restrict the sale of guns below age 21. ==Offices==