Citibank has had its ups and downs in credit card performance. The occasional downs made it a lightning rod for critics, who said the only thing the company had going for it was its size.

Size, most observers now agree, is no small matter. All of the Citicorp unit's closest competitors are reaching for it through acquisitions and aggressive marketing, but they have not yet been able to dislodge the perennial leader.

Citibank has reigned supreme - larger than any other bank card business - ever since its introduction of nationwide mass mailings in the 1970s.

With $60.3 billion of managed card loans at midyear, Citibank had a $7.6 billion margin over the No. 2 U.S. company, MBNA Corp., and $18.7 billion over No. 3, Banc One Corp.

Citi showed its resolve to stay on top by acquiring the $14.5 billion AT&T Universal Card portfolio in April.

Still, A. Sami Siddiqui, president of the North American card operation, said, "The question of size is paid too much attention."

Despite the perceptions, Citibank had other, broader reasons for buying the AT&T business, Mr. Siddiqui said during a recent interview at Citibank's building in the Long Island City section of New York.

The 14 million AT&T accounts constituted a vast new marketing opportunity for a variety of Citicorp financial products. "I look at our business as a distribution channel," Mr. Siddiqui said.

The AT&T acquisition, widely viewed as a bold stroke by a bank that had relied for years on internal growth, is also the highlight of Mr. Siddiqui's brief tenure in the North American card job.

A 20-year veteran of the card industry, Mr. Siddiqui joined Citibank in June 1997 from Providian Corp., San Francisco, where he was executive vice president of unsecured lending.

Mr. Siddiqui, 45, had worked for Citibank in Los Angeles from 1979 to 1981, following his graduation from California State University.

"One of the things Sami has been hired to do is to reverse" some mediocre growth trends, said Ronald I. Mandle, an analyst with Sanford C. Bernstein & Co., New York.

Receivables rose more slowly than the industry average for the last six calendar years, according to The Nilson Report, an industry newsletter. In 1997, Citibank's card balances increased a meager 2.6%, well below the industrywide 8.4%. The bank's 4.9% in 1996 trailed the industry's 14.2%.

Citibank's card accounts declined 2% in 1997 and 1% in 1996.

With monoline competitors getting all the recent attention for product innovation and profitability, "it is hard to think of (Citicorp) as a leader in any way but size," said Lawrence W. Cohn, an analyst with Ryan, Beck & Co.

But the New York banking company has a long tradition of leadership - in both size and earning capacity - and it is to regain its No. 1 position in financial industry assets through the merger with Travelers Group.

"Leaders never shake it off entirely," said James B. Shanahan of Business Dynamics Consulting Inc., Nyack, N.Y. "It's still there in the organization."

And Mr. Siddiqui is determined to tap those instincts.

"I think things are changing," he said. "We have seen what has happened to our market share. We have noticed what has happened to our profitability. We have 14,000 people here who want to keep our great heritage and tradition alive. And we are dead serious about it."

Unlike his predecessor, Roberta J. Arena, who had responsibility for international markets in addition to the United States and Canada, Mr. Siddiqui's mandate is to focus solely on the North American market and "reestablish our leadership," he said.

He will report to Robert I. Lipp, a Travelers Group vice chairman designated co-chief executive of the new Citigroup's global consumer business. Mr. Lipp will share that role with William I. Campbell, executive vice president of Citibank's global consumer business.

If there is one thing Citibank critics and admirers agree on, it is the bank's unrivaled overseas presence. It has Visa and MasterCard card operations in 43 countries. As competitors like MBNA and Capital One have tested international waters - seen as a necessity because of U.S. market saturation - they have flocked mainly to the United Kingdom.

Mr. Siddiqui said he was focusing on proprietary products, such as the Driver's Edge card; strategic alliances, along the lines of the cobranding partnership with American Airlines and the AAdvantage card; and cross- selling efforts with Travelers.

Driver's Edge, the successor to the Citibank-Ford Motor Co. card that was discontinued last year because Ford was dissatisfied with the profit flow, was launched in January. Cardholders can apply rebate credits toward the purchase of any vehicle regardless of manufacturer.

In its earnings report for the 1998 second quarter, Citibank disclosed that its credit card customers were being solicited for Travelers auto insurance. Mr. Siddiqui said that some Travelers customers were also being offered Citibank credit cards.

He gave no further details but said Citibank might develop a "proprietary" credit card designed exclusively for Travelers customers.

The AT&T card, in many respects a cobranding arrangement with its own set of customer benefits, also offers significant cross-selling opportunities. For example, Citibank hopes to get access to the cardholders who call AT&T Corp. for calling cards and wireless service. "If we can leverage those calls, it gives us a leg up on the industry," Mr. Siddiqui said.

"Citi is repositioning itself for a new leadership position with the AT&T portfolio," said David Robertson, president of The Nilson Report.

Some analysts questioned the logic of buying a portfolio that, they said, had similar characteristics to Citibank's card business. Both companies were suffering high chargeoffs and had difficulty attracting people who paid finance charges, the major source of credit card profits.

Citibank "looked in a mirror and bought their smaller sister, said Mr. Cohn. "Size is the only thing they got."

Mr. Siddiqui, dodging the accusation, said, "Some banks are growing faster than we, and if they surpass us, so be it."

In contrast with a company like MBNA, where everything revolves around credit, Citibank's card unit must provide support to the other products within the bank.

The card division "is the cow that feeds the rest of the business," said Mr. Robertson. "It's part of a bigger picture."

Loren Smith, a Taos, N.M.-based consultant who held senior consumer marketing positions at Citibank from 1989 to 1993, said, "The fundamental thing that separates Citibank from other institutions is that they understood from the beginning that they are in the business of helping consumers manage their money, and the card became an extension for that philosophy."

Whether the addition of AT&T Universal helps Mr. Siddiqui or becomes an albatross around his neck remains to be seen, said industry sources.

But at least one industry-leading executive likes what he sees - Mr. Siddiqui's former boss. Shailesh J. Mehta, chairman and chief executive officer of Providian, said Mr. Siddiqui "has made some good tactical moves so far."

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