Formed out of a 1998 merger between the bank Citicorp and insurance company Travellers group, Citigroup is one of America’s top four banks, and one of the largest financial institutions in the world, offering a full range of financial services across all continents. Bailed out by the US government in 2008, the bank has since returned to stable profitability, though revenue remains well below pre-crisis levels.
The bank’s formation was made possible by the repeal of the Glass-Steagall Act, separating investment from commercial banking in 1999. Some of the melange of brands which became Citigroup after 1998 included the investment bank Salomon Brothers and brokerage Smith Barney. At its creation, Citigroup was the largest financial firm in the world. A major player in all aspects of the financial sector, including brokerage, private wealth management, transaction banking, and investment banking, Citigroup was heavily exposed to sub-prime mortgage debt in the later 2000s. In 2007, this came to a head, with a 60% decline in net revenues putting the group in dire circumstances.
Despite receiving $25 billion in emergency funding from the state, Citigroup was insolvent at the end of 2008. In order to save the company, the US government agreed to fund Citigroup with a further $20 billion and to guarantee its bad debts. In return, the US received wide-reaching powers over the group, and an immense restructuring program saw large parts of the business sold-off or reorganized. After a difficult period immediately after the crisis, Citigroup’s transformation saw the shedding of unprofitable business lines and a renewed focus on retail banking and its US operations. Now boasting profitable business lines in credit cards, wealth management, and institutional banking services across Europe, Asia, Latin America, and the US, Citigroup remains one of the largest banks globally.
A strong focus on cost discipline and efficiency saw Citigroup return to similar profit levels to those seen before 2008 in 2020, on a smaller balance sheet. A constituent of the S&P500, Citigroup’s main investors are Vanguard and Blackrock. The US government’s stake in Citigroup was profitably exited in 2010.
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Citigroup regularly pays out a quarterly dividend to investors. You can find full dividend history, yields and other information by logging onto your account here. Dividends always remain discretionary and are not guaranteed.
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