 |
Citi® Credit Press Room |
|
|
|
|
New York-based Citigroup is a financial services company and was ranked as the world's largest company by Forbes Global 2000 in 2006. Worldwide, Citigroup employs almost 300,000 people in more than 90 countries, including Ecuador, Indonesia, and Portugal. Citigroup earned more than $120 billion in revenue in 2005.
Citigroup's current CEO is Charles Prince. Before taking the helm in 2003, he worked as Citigroup's Chief Operations Officer and had been with the company since 1979 when it was still known as Commercial Credit Company. Between 1986 and 2003, Sanford Weill was the CEO of Citigroup.
Early History of the Companies
Citigroup actually began as two separated companies – Citicorp and Travelers Group - which merged in 1998.
Formed in 1812, Citicorp (originally known as City Bank of New York, then Citibank)was one of the oldest banks in the United States. In 1897, it became the first bank to begin foreign exchange (FOREX) trading. By 1902, Citicorp had offices throughout Asia and Europe.
Citicorp continued to grow. In 1919, it became the first bank to have more than $1 billion in assets accumulated.
Through the next few decades, Citicorp introduced new ideas to the financial services industry, including offering unsecured loans (1928), providing monthly payment loans to small businesses (1935), investing the negotiable certificate of deposit (CD) (1961).
Citicorp also opened the first foreign-owned bank in Russia (1994) and the first full-service bank in China for the last 45 years (1995).
Travelers Group was formed from an earlier merger between Salomon Inc. and Smith Barney.
Salomon Inc. was formed in 1910 by three brothers and later Morton Huztler. They became the first dealer in U. S. government securities. Throughout the early part of the 20th century, Salomon Inc. continued to grow in part because banks began to rely on bonds after the Great Depression and because of the use of bonds to finance World War II. Their use of technology and automation also helped spur on their success.
Smith Barney was formed in 1938 after Charles D. Barney & Co (formed in 1873) and Edward B. Smith & Co (formed in 1892) merged. Smith Barney is purchased by a private financial services company called Primerica in 1987. Six years later, Primerica purchases the Travelers and forms the Travelers Group of which Smith Barney becomes a subsidiary.
Four years after the Travelers Group is created, Salomon Inc. is combined with Smith Barney as a merged subsidiary.
Citigroup & Credit Cards
Most of Citigroup's credit card activity comes from the Citicorp half of the merger. Originally, Citicorp purchased the Carte Blanche card from Hilton Hotels in 1965, but they were forced by the government to sell the card. In 1967, Citicorp introduced their first credit card which was known as the “Everything” card and was promoted as an alternative to the BankAmericard being issued on the West Coast. While they had initially hoped the “Everything” card would become its own brand, just two years later the cards became part of MasterCard (at the time, Master Charge).
In 1981, Citicorp purchased Diners Club, which was the first credit card company. The company began in 1950 and within a decade had already accumulated 20,000 customers. While they were originally only accepted at restaurants, Citigroup expanded the type and number of retailers who would accept the cards.
By 1993, Citicorp had become the largest issuer of credit cards in the world. Three years later, they reached another milestone: they had issued the largest number of credit cards in Asia.
After the merger, the credit card division of Citigroup became part of The Global Consumer Group arm of the company. Over 40% of the profits for this part of the company come from credit cards. In fact, Citigroup still maintains the position as largest issuer of credit cards in the world, the title first held by Citicorp back more than a decade ago.
Citigroup & Late Fees
In 2001, a class action lawsuit was filed against Citigroup claiming they had been improperly assessing late fees against their credit card users. Eventually, Citigroup settled the suit for $45 million.
After the lawsuit, Citigroup began lobbying the government to pass tort reform. In 2005, the Class Action Fairness Act was signed into law by President Bush. The law limits the total damages which can be sought in a non-federal class action law suit to only $5 million.
|
