Can Citigroup Still Expand?

Can Citigroup Still Expand?

Is there any growth potential for this business? What opportunities and threats does Citibank face?

Citigroup has more than 200 million customers and is operational in over 100 countries in the world. This means it enjoys a strong market position in a consolidated industry and global brand recognition that provides it a competitive edge.

Opportunities

Global brand recognition is a huge advantage for Citigroup in order to expand its operations, win customer trust and confidence and cross sell services in different areas. Citigroup’s global brand ranking enjoyed 8th position in 2008, according to BusinessWeek and Interbrand rankings.

Citigroup is one of the largest financial companies in the world with an asset base and infrastructure to support its global operations. Citigroup provides consumer banking, corporate fund management, credit card processing, brokerage and mortgage banking. This means that it has a wide network of branches, ATM machines, call centers and a comprehensive web presence to support these operations. The availability of this network and the economies of scale allow for easy expansion into geographic areas and scalability.

Citigroup’s wide range of products and services position them optimally for organic growth. In addition to increasing customer satisfaction, the extensive range of services enhances the group’s cross-selling opportunities and increases its resistance to temporary downfall in demand for one product segment or business.

Citigroup also acquired Egg Banking, one of the first fully online banks in the world and the largest provider of financial services in the UK. By acquiring Egg, Citigroup has access to its 3 million customers and can offer them an array of services including account payment, credit cards, mortgages etc. This acquisition is geared to strengthen Citigroup’s brand portfolio and enhance its customer base in Europe.

The global commercial banking industry is growing due to economic growth in the world and is projected to grow at about 4.8% annually till 2011. This gives Citigroup a lot of opportunities to grow its business too, especially in the BRIC countries. Citigroup has acquired Guangdong Development Bank in China, AKBANK in Turkey and HDFC in India. The group can leverage these acquisitions to increase its revenues from international operations to offset decline in home market in the US.

Threats