Report on Citi Bank

Citi

Citi is a global financial group that provides a wide range of financial services and products to more than 200 million individuals, legal persons, state authorities and institutions in more than 100 countries throughout the world. Services provided include retail banking, corporate and investment banking, insurance and asset management

Introductory Information

The Citibank's history dates back to the founding of Citibank in 1812.
Citibank Pakistan has demonstrated its ability to identify market needs and develop products which are unique in concept and fulfill customer requirements. The aptitude to develop lifelong relationships while maintaining quality measures and technological efficiencies has assisted Citibank in becoming a true market leader.

Citibank (Slovakia) as. has been conducting business in all areas of banking and financial services since 1 November 1995 based on a universal banking license issued by the National Bank of Slovakia. Citibank (Slovakia) as. is a 100% subsidiary of the Citibank Overseas Investment Corporation, which is owned by Citibank N.A. New York. It is also part of the American holding company Citigroup Inc.

Chairman’s message

Each year in this report we present the facts and figures of our Foundation’s giving to communities around the

world. We’re proud of these numbers. They demonstrate the power and reach of Citi. Yet, the most compelling story is what stands behind the numbers: longstanding relationships with the organizations we support.

Our commitment results in grants that provide the financial, human, and professional resources our partners need to help shape their communities. Take microfinance, for example. The Foundation has been supporting ACCION International for more than 30 years and along the way has helped the organization pioneer and transform an industry that barely existed a few decades ago. Today, microfinance is everywhere, providing real opportunities for poor people to improve the quality of their lives and access financial services.

The Foundation’s grant making is also informed by insight from our nonprofit partners, allowing us to develop

and fund programs that have the greatest impact in our core areas of support: Financial Education, Educating the Next Generation, and Building Communities and Entrepreneurs. Working with a global network of Citi colleagues and nonprofits in the community, Citi and the Citigroup Foundation fund programs that draw on our expertise and have a significant impact on our communities. Our giving supports programs that help

people improve their lives, businesses grow, and communities prosper.

As we look ahead to deepening the Foundation’s influence in 2007 and beyond, I’m pleased that Pam Flaherty

is leading the way as President and Chief Executive Officer of the Citigroup Foundation. Pam has a long history of service as a board member of many prominent nonprofit organizations, and she will add valuable direction as we build on the Foundation’s extraordinary achievements.

Letter From The President

I am proud to celebrate the stories and relationships that help make a difference in our communities. Together the Foundation and Citi have accomplished a great deal, including providing more than $137 million in grants in 2006 and responding to natural disasters with more than $30 million in Foundation, Citi, and employee giving.

Yet our support is more than writing a check or making a grant. The Foundation’s grantmaking helps employees

pursue charitable volunteer efforts. Each day, thousands of Citi employees make a tremendous difference in their communities by donating their time and talent to local nonprofits. Our employees spend countless hours in volunteer activities, including teaching financial education courses, mentoring students, and building

homes for families. These considerable efforts reinforce our company’s shared values and our commitment to making the world a better place.

Philanthropy and community involvement are not only important aspects of our role in society, but they also

say something about who we are. We will continue to look for new and better ways to serve our communities.

I’m looking forward to the opportunities that lie ahead, and I am pleased to be working with the Foundation Board and staff, our partner organizations, and Citi colleagues to strengthen the Foundation’s impact in communities around the world.

History

On June 16, 1812, with $2 million of capital, City Bank of New York (now Citibank) opened for business in New York City. Through many different leaders and economic environments over the course of its rich history, Citibank continues to grow and prosper.
In 1968, First National City Corporation (later renamed Citicorp), a bank holding company, became the parent of Citibank.
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.

1812	June 16: New York State charters City Bank of New York with authorized capital of $2 million and paid­in capital of $800,000. September 14: City Bank opens for business to serve a group of New York merchants. Samuel Osgood is elected president (1812–1813).
1813	First dividend is paid
1822	Farmers' Fire Insurance and Loan Company is founded, the first incorporated trust company in the U.S. Its name becomes Farmers' Loan and Trust Company in 1835, and it merges with National City Bank in 1929.
1827	Isaac Wright is elected president (1827–1832).
1856	Moses Taylor is elected president (1856–1882).
1865	City Bank joins the new U.S. national banking system and becomes The National City Bank of New York.
1882	Percy Pyne is elected president (1882–1891).
1891	James Stillman is elected president (1891–1909). He also serves as chairman (1909–1918).
1894	Becomes the largest bank in the U.S.
1897	First major U.S. bank to establish a foreign department; begins foreign­exchange trading.
1902	Expands into Asia, Europe and India, with offices from Shanghai to Manila.
1904	Introduces traveler's checks. The bank moves to larger quarters at 55 Wall Street, its headquarters until 1961
1909	Frank Vanderlip is elected president (1909–1919); James Stillman is elected the first chairman (1909–1918).
1913	The bank is the first contributor to the Federal Reserve Bank of New York
1914	November 10: National City inaugurates the first foreign branch of any U.S. national bank, in Buenos Aires.
1918	International Banking Corporation, a U.S. overseas bank, becomes a wholly owned subsidiary of National City.
1919	First U.S. bank with $1 billion in assets. James A. Stillman, son of chairman James Stillman, is elected president (1919-1921).
1921	National City is the first major U.S. bank to offer compound interest on savings accounts. Charles E. Mitchell is elected president (1921–1929) and later chairman (1929–1933).
1928	May 3: First major American bank to offer unsecured personal loans to its depositors. National City Bank is the first to open a Personal Loan Department.
1929	The bank becomes the largest commercial bank in the world. Expansion is accelerated with a merger: the Farmers' Loan and Trust Company becomes the City Bank Farmers Trust Company. Gordon S. Rentschler is elected president (1929-1940) and later appointed chairman (1940-1948).
1933	James H. Perkins is elected chairman (1933–1940).
1935	The bank develops monthly payment loans for small businesses.
1936	First bank in New York City to offer consumer checking accounts with no minimum-balance requirement.
1939	Citibank has opened 100 offices in 23 countries outside the U.S., forming the largest international bank.
1940	William Gage Brady, Jr. is elected president (1940–1948) and later chairman (1948–1952).
1945	The bank handles more than $5.6 billion in U.S. Treasury securities in a series of war loan and victory loan drives.
1948	Howard C. Sheperd is elected president (1948-1952) and later chairman (1952-1959).
1952	James Stillman Rockefeller is elected president (1952–1959) and later chairman (1959–1967)
1961	The bank changes its name to The First National City Bank of New York.
1962	George S. Moore is elected president (1959–1967) and later chairman (1967–1970).
1964	Invents the negotiable certificate of deposit (CD). A new subsidiary, First National City Overseas Investment Corporation, becomes the bank's holding company for non-U.S.-based subsidiaries and affiliates. The new home office, 399 Park Avenue, is completed.
1965	The bank marks its 150th anniversary by shortening its name to First National City Bank.
1966	Enters the leasing business.
1967	Enters the credit card business
1968	Walter B. Wriston is elected president (1967–1970) and later serves as chairman (1970–1984). Introduces Citibank's first credit card ­­ the "First National City Charge Service" ­­ popularly known as the "Everything" card.
1969	The "Everything" card is converted to Master Charge (today's MasterCard).
1970	William I. Spencer is elected president (1970–1982).
1976	First National City Bank becomes Citibank, N.A. (for National Association).
1977	Citibank launches Citicard Banking Centers, anchored by ATMs and the Citicard. The 24-hour ATMs are for the first time used for more than emergency cash.
1981	Becomes the world's leading foreign­exchange dealer.
1982 to 1984	Savings & Loan acquisitions in California, Florida, Illinois and Washington, D.C. make Citicorp the largest bank holding company in the U.S.
1984	John S. Reed is elected chairman (1984-1998). Citibank London is a founding member of CHAPS Clearing Company, one of the largest real-time gross settlement systems in the world, second only to Fedwire in the U.S.
1985	Introduces Direct Access® in New York, linking personal computers in homes and offices with Citibank.
1986	Introduces unique touch-screen automated teller machines in New York City and Hong Kong.
1989	Becomes the leading issuer of securitized credit card receivables. A new skyscraper at Court Square, Long Island City, New York, is built.
1992	Citibank, N.A. becomes the largest bank in the United States. Citicorp's global reach links branches and offices in more than 90 countries.
1993	Becomes the largest credit card and charge card issuer and servicer in the world. Merges savings banks acquired in the 1980s and begins operating them as Citibank, FSB under a single charter.
1994	Opens the first fully foreign­owned commercial bank in Russia.
1995	Celebrates the 20th anniversary of the Consumer Banking Business. Opens the first full­service branch in China in 45 years and branches in Vietnam and South Africa.
1996	Has largest number of credit cards in Asia. Taiwan becomes the first country outside the U.S. with over 1 million credit cards.
1998	October 8: All Citicorp and Travelers Group divisions merge to become Citigroup Inc

Milestones

The nineties were a decade of domination and leadership for Citibank in the Pakistani marketplace and the trend continues into the new millennium.

1990	Consumer Bank was established.
1992	Consumer Asset Business is launched. Car Financing is introduced. CitiGold Priority Banking is established. CitiPhone Banking launched.
1994	Citibank Visa Card (Gold and Silver) is launched.
1995	Self-Service Banking launched.
1996	Citibank, N.A. launches its Intranet System in April. First bank to launch a Photo Credit Card.
1997	Citibank wins over 35 awards under the Euromoney Excellence Awards. These awards included "Best Bank" and "Best Emerging Market Bank" for two successive years. Citibank Credit Cards acquire 100,000 members in less than 3 years. This milestone was achieved faster than any other Citibank business in the Asia Pacific Region. Citibank and IBA develop an MBA program focused on Marketing of Financial Services (MFS). Citibank, N.A. undertakes a three year support program for fund raising for the Lady Dufferin Hospital. Citibank, N.A. pledges a donation to LUMS for their "Students Aid Program". Citibank, N.A. in November holds its first ever Car Financing Dealer conference in Bhurban.
1998	Citibank launched Pakistan's first affinity card known as the "Citibank-Shaheen Credit Card".
1999	First foreign bank to launch MasterCard in Pakistan. Citibank Home Loans is launched. Car Financing Product Feature enhancement (25% Down Payment, Free Pre-approved Credit Card with each car). 0% Down Payment product for your second car. Complaint Tracking System (CTS) launched.
2000	Citibank, N.A. is the first Financial Institution to launch Personal Loans in Pakistan. The cards business launches the first ever Co-brand Credit Card in Pakistan with Caltex. Dewan Farooq Motors Limited manufacturers of KIA and Hyundai cars in Pakistan, and Citibank joint label financing program. Suzuki Car Financing private label Car Financing loan financing program. Citibank Home Loans introduces Adjustable and Fixed Rate Home Loans. The Paktel-Citibank Credit Card is launched in June. LG-Citibank Installment Plan is launched in June. The liabilities business launches the "Karobar Account". CitiPhone Banking introduces Self Service Banking

Citibank

MANAGEMENT HIERARCHY

MAAL road lahore BRANCH

Citibank
Balance Sheet
As at 31 December 2006
ASSETS:	2006	2005
Cash and balances with treasury banks	5,881,934	8,383,947
Balances with other banks	2,975,916	729,186
Lendings to financial institutions	3,831,005	4,796,504
Investments	21,937,387	19,845,100
Advances	51,289,271	39,163,339
Operating fixed assets	1,186,499	340,656
Deferred tax assets – net	828,544	573,115
Other assets	3,385,882	2,641,794
91,316,438		76,473,641
LIABILITIES:
Bills payable	1,436,826	-
Borrowings	15,409,454	12,612,553
Deposits and other accounts	63,103,884	53,115,538
Sub-ordinated loans	-	-
Liabilities against assets subject to finance lease	-	-
Deferred tax liabilities	-	-
Other liabilities	5,562,319	3,603,014
	85,287,932	70,767,931
NET ASSETS	6,028,506	5,705,710

Citibank
Profit and Loss Account
For the year ended 31 December 2006
	2006	2005
(Rupees in ‘000)
Mark-up/Return/Interest Earned	9,017,327	5,635,170
Mark-up/Return/Interest Expensed	4,113,089	2,035,755
Net Mark-up/ Interest Income	4,904,238	3,599,415
Provision against non-performing loans and advances - net	290,444	457,742
Provision for diminution in the value of investments	50,000	-
Bad debts written off directly	614,765	169,208
	955,209 626,950
Net Mark-up/ Interest Income after provisions	3,949,029	2,972,465
NON MARK-UP/INTEREST INCOME:
Fee, Commission and Brokerage Income	1,648,434	1,804,183
Dividend income	8,995	-
Income from dealing in foreign currencies	427,746	451,897
Gain on sale of securities	5,434	79,678
Unrealized gain on revaluation of investments	4,210	8,543
Other income	579,791	248,450
Total non-mark-up/Interest Income	2,674,610	2,592,751
6,623,639		5,565,216
NON MARK-UP/INTEREST EXPENSES:
Administrative expenses	4,053,108	2,962,639
Provision for diminution in the value of non-banking assets - net	(5,408)	6,750
Operating fixed assets written off	638	1,265
Other charges	140	672
Total non-mark-up/Interest expenses	4,048,478	2,971,326
2,575,161		2,593,890
Extra ordinary/unusual items	-	-
PROFIT BEFORE TAXATION	2,575,161	2,593,890
Taxation - Current	1,332,650	1,221,374
- Prior years	(141,594)	-
- Deferred	(261,169)	(135,738)
	929,887	1,085,636
PROFIT AFTER TAXATION	1,645,274	1,508,254

Citibank
Cash Flow Statement
For the year ended 31 December 2006
		2006	2005
(Rupees in '000)
CASH FLOW FROM OPERATING ACTIVITIES:
Profit before taxation		2,575,161	2,593,890
Less:	Dividend income	(8,995)	-
		2,566,166 2,593,890
Adjustments:
Depreciation		159,232	125,306
Amortization		2,396	-
Provision for diminution in the value of investments		50,000	-
Provision against non-performing advances - net		290,444	457,742
Provision for diminution in the value of non-banking assets-net		(5,408)	6,750
Unrealized gain on revaluation of held for trading investments		(4,210)	(8,543)
Bad debts written off directly		614,765	169,208
Charge for defined benefit plan		33,062	36,792
Gain on sale of fixed assets		(4,874)	(10,713)
Lease rentals Operating fixed assets written off		6,506 638	3,565 1,265
		1,142,551	781,372
3,708,717			3,375,262
(INCREASE) / DECREASE IN OPERATING ASSETS:
Lendings to financial institutions		965,499	7,445,433
Held-for-trading securities		818,276	(2,111,986)
Advances		(13,031,141)	(6,782,718)
Others assets (excluding advance taxation)		(738,680)	(966,540)
(11,986,046)			(2,415,811)
(INCREASE) / DECREASE IN OPERATING LIABILITIES:
Bills payable		(224,551)	449,558
Borrowings		2,782,475	2,804,103
Deposits and other accounts Other liabilities		9,988,346 1,190,680	6,012,710 1,144,740
		13,736,950	10,411,111
5,459,621			11,370,562
Contribution to gratuity fund		(23,699)	(49,315)
Income tax paid		(431,794)	(78,389)
Net cash flow from operating activities		5,004,128	11,242,858
CASH FLOW FROM INVESTING ACTIVITIES:
Net investments in available-for-sale securities		(2,946,175)	(16,841,195)
Dividend income		8,995	-
Investments in operating fixed assets		(1,027,703)	(188,543)
Sale proceeds from disposal of property and equipment		24,468	20,060
Net cash flow used in investing activities		(3,940,415)	(17,009,678)
CASH FLOW FROM FINANCING ACTIVITIES:
Payments of lease obligations		(6,506)	(3,565)
Remittances made to head office		(1,378,212)	(1,950,756)
Net cash flow used in financing activities		(1,384,718)	(1,954,321)
Effects of exchange rate changes on cash and cash equivalents		51,296	20,516
(Decrease) in cash and cash equivalents		(269,709)	(7,700,625)
Cash and cash equivalents at beginning of the year		9,113,133	16,813,758
Cash and cash equivalents at end of the year		8,843,424	9,113,133

SWOT ANALYSIS

For any institute or organization, its environment contains certain opportunities & threats.

So in this situational analysis, I try to match organizational strengths and weaknesses with the environmental opportunities and threats to determine the organization's right niche. SWOT stands for strengths, weaknesses opportunities and threats.

Strengths:

ü Citibank is making an efficient use of latest computer & telecommunications terminology for facilitating the international banking transaction as well as external & internal banking procedure.

ü Citibank has a well-established reputation.

ü It has a wide range of products/services to attract the customer or clients.

ü The bank has highly trained & motivated pool of human resources. It is the effectiveness & efficiency of the employees at all levels which cause the success of the bank.

ü The bank has a deep knowledge of market.

ü Citibank provides high quality & personalized services to its customers.

ü The office set up is calm & environment is very friendly. Such an environment of bank helps a great deal in enhancing the performance of the employees.

ü In order to update the knowledge of employees & enhance their understanding to job, training facility is also provided to them. So it can be said that it has a deep knowledge of management.

Weaknesses:

ü Lack of innovation in products.

ü Services are expensive as compared with the local commercial banks.

ü No doubt there are trained employees but these employees are lacking in having complete knowledge about their products that are offered to customers then how can they sell them effectively to the customers.

ü During my stay at Main branch (MAAL Road Branch) I realized that online banking is not working properly due to which they are loosing customers.

ü On other side ATM creates problems for the customers and discourage to customer in getting their money.

Opportunities:

ü This will generate a new client base for the Bank. The bank will experience a lucrative market in both the corporate and consumer banking.

ü At present they have 15 specially designated Islamic Banking branches operating in the market, which cover 9 major cities. Consequently they have designed formal training modules for their team members in Islamic Banking and are committed to developing their skill and confidence levels for optimum performance. They should introduce Islamic branches where they don’t

ü No doubt its network has expanded all over the country but opportunities always exist so it should expand its network in those areas where it is lacking due to increase in competition all over the country.

ü There were days when organizations come with quality products and succeed in the market without taking any change in products with time but times have surely changed now the organizations have to introduce new innovative products with high quality to sustain its position in market. So Branches should introduce new innovative products to sustain its position in market.

ü One of the opportunities that bank Bank Citibank has been provided by its competitors is that it has become very much possible for Citibank to develop and target a certain market and catch the customers for earning long term profitability. Financial strength is providing to be an effective tool for winning the customers.

ü The major opportunity, which I realized is that it, should consider more on its promotional activities to target profitable customers as well as attract competitor’s customers, which is major achievement of any organization.

Threats:

ü In Pakistan new banks are constantly coming with new innovative products having high quality so this will result of competition in the banking sector.

ü Another threat is that banks are improving their customer services by incorporating new informational technology.

ü The existing banks in the business are providing more innovative services to clients. This threatens the client base of Citibank because the clients may switch to a bank offering more variety in the services.

ü Today the banking sector is improving not only by the hard work of concerned persons but Government is also encouraging the ideas and policies banks implement for the improvement and development of strong financial institutes. As the competition is increasing banks all over the country are moving towards better techniques for collecting and transferring data within the branches and to the head office, as far as Citibank is concerned this system needs attention and the present use of better IT technique in other banks is proving to be a serious threat for Citibank.

ü Competitors of Citibank are banking an aggressive marketing program to get the mind as well as heart share of the Citibank clients.

ü As demand of banking services has increased, banks are moving towards expansion. They are trying to open more and more number of branches all over the country and thus this is a serious threat for Citibank.