UPDATE:Citi's Consumer, Cards Chiefs Revamp Units For Sales Focus
February 23 2011 - 4:30PM
Dow Jones News
Citigroup Inc. (C) is reorganizing its credit card and retail
banking operations in the U.S. to improve service and boost sales,
and made management changes within those units, according to Citi
memos Wednesday.
Top executives at Citi, the third largest bank in the U.S. by
assets, have long felt the bank was too technocratic--focused on
products rather than service and selling. Manuel Medina-Mora,
consumer chief for the Americas, pledged to change this focus, and
in September hired Cecilia Stewart and Jud Linville as heads of
retail and cards, respectively, to help design and implement a new
strategy.
Wednesday, the two introduced to their staff organizational and
management changes the bank hopes will help in targeting the right
customers with the right product. In a move to focus more on
customers, retail banking and cards will be organized into units
focused on customer segments, product development, and
distribution.
In a memorandum to Citi's retail banking staff, Stewart said,
"We must align ourselves to the segments, strengthen our product
and service offerings...enhance the customer experience...and
maintain oversight and control of our underlying risks. Achieving
this will improve our market position and generate sustained,
long-term growth and profitability."
Stewart, the former head of retail banking at Wachovia Corp.,
joined Citi from Morgan Stanley (MS).
Linville wrote in his memo to the cards staff, "We must first
protect our franchise by reinforcing controls" in the rapidly
changing environment for the credit and debit card business, "in
essence funding our future while restoring our brand strength." He
joined Citi from American Express Co. (AXP)
Citi's retail business will have five segments: the branch
network, product development, two separate customer segments, and
risk and controls.
Middle-market commercial banking also reports to Stewart, and
she is apparently satisfied with the unit's results--she made no
changes to the business led by Sunil Garg.
Stewart hired Steve Troutner from Bank of America Corp.'s (BAC)
mortgage business to head its banking products team, according to a
memo. Brad Dinsmore, who headed Citi's North American branch
network, will take on another job within Citi--a search for his
replacement as the head of Citi's new branch network segment is
underway. Citi is also looking for a head of risk and controls.
Venu Krishnamurthy was named in a memo as head of the
high-net-worth and affluent segments, which include responsibility
for the brokers in Citibank branches. He was previously lead
finance officer at Citi's private bank. Deborah McWhinney, who
headed the wealth management business for Citibank, changed jobs at
Citi last week.
In cards, segments include affluent and co-branded cards; mass
market; and loyalty and new products. Linville hired Ralph Andretta
from Bank of America to run loyalty and new products and is looking
for a head of the mass-market business. The other managers are
internal appointments.
Citi has gone through major restructurings, and abandoned the
attempt to grow by taking more risk, a strategy that brought it to
the brink of collapse. Citi Chief Executive Vikram Pandit
re-focused the bank on the deposit, lending, and capital markets
businesses and urged greater focus on customers. He has been
divesting Citi of a string of businesses that don't generate
deposits, and of poor-performing loans and securities that caused
painful losses.
But its U.S. retail banking business has until now not undergone
any dramatic restructuring. Medina-Mora's strategy is to make use
of the businesses Citi is in, and strengthen Citi's presence in
major metropolitan markets.
-By Matthias Rieker, Dow Jones Newswires; 212-416-2471;
matthias.rieker@dowjones.com
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