Though other banking companies regularly cite it as the benchmark for global branding, an executive at Citicorp says it still has a long way to go.
The nation's second-largest banking company needs a stronger brand to reach its goal of one billion retail customers worldwide by 2010, said William I. Campbell, executive vice president in charge of global consumer banking. He spoke Wednesday at a symposium in New York sponsored by the Bank and Financial Analysts Association.
Mr. Campbell said a "cultural shift" is needed in the way Citibank employees around the world-there are now 92,000 of them-relate to customers, and the way those customers respond to the brand.
"Today the profit paradigm on the consumer side is based on bricks and mortar," Mr. Campbell said. "We have to completely change the way the industry is structured."
Citicorp has undertaken a number of initiatives to boost lackluster revenues in its consumer businesses, said Mr. Campbell, who characterized 1997 as "a year not without its challenges" for the $311 billion-asset company. Last year Citicorp suffered from slow revenue growth in its retail businesses, particularly in its U.S. credit card operations. High card chargeoffs prevented Citicorp from increasing card market share, Mr. Campbell said.
As a result, he said, Citicorp is consolidating operating systems, integrating and expanding the U.S. credit card business, controlling consumer credit exposure in Asia, and forging strategic alliances.
In October the company also announced a restructuring, largely of its retail businesses and its back office. Citicorp took an $889 million pretax charge in last year's third quarter and said it would eliminate 7,500 jobs.
The company is expecting higher revenues and profits to come from reduced reliance on traditional branches and the creation of uniform product offerings-both of which should strengthen Citi's brand, Mr. Campbell said.
Citicorp has long been considered a leader among financial services brands, according to image consultants. Few banking companies have focused on branding until recently.
"They do not have any true competitors in the U.S. in terms of brand except for Chase and BankAmerica," said Brannon Cashion, a consultant at Addison Whitney Inc. in Charlotte, N.C.
But even Citi has not achieved the name recognition that consumer product companies such as Coca-Cola and McDonald's have, Mr. Cashion said.
A stronger brand would help Citibank differentiate itself in the consumer banking market and would eventually create a profit premium, Mr. Campbell said.
"Merrill Lynch gets a big fat premium on brokerage services" as a result of its strong brand, Mr. Campbell said. "There's nothing in our information that says our branding premium won't be as good or better," he added.
