Citibank Sales of Mutual Funds Surge

Goal Is for an $8 Billion Portfolio Within Four Years

Bolstered by months of aggressive advertising, Citibank's mutual funds have grown 59% since yearend to over $2 billion in assets.

The rapid growth illustrates the bank's commitment to the business and its desire to be not only among the top banks, but among the top mutual fund companies as well.

"We are going to be a player of size," said Leslie Bains, head of the investment division of Citibank's private banking division. "We clearly are targeting that in a short period of time."

Aiming High

The Citicorp unit is aiming to have $8 billion in its Landmark family of funds and to be a topranked player in the mutual fund industry within four years, she said. The 11 Landmark funds now have $2.13 billion in assets, up from $1.34 billion on Dec. 31, the bank said.

The increase pushes the New York giant into 7th place among banks in total mutual fund assets under management, versus 10th place at yearend, according to New York-based Lipper Analytical Services, which tracks mutual funds.

When institutional assets are excluded, Citibank has moved up two notches to 4th place in the period, Lipper added.

Dwarfed by Big Players

Though Citibank is a fastgrowing force in bank mutual funds, it is dwarfed by topranked Provident National Bank of Philadelphia, which has more than $17 billion in fund assets under management.

And compared with the entire mutual fund industry, with powerhouses like Fidelity Investments, the bank does not measure anywhere near the top players.

To build business, Citibank launched an aggressive advertising campaign in May. After the newspaper ads and radio spots began appearing in metropolitan New York, the bank pulled in an impressive $16 million a day in some of its funds, Lipper said.

The ads, which also appear once a week in the national edition of The New York Times, claim competitive yields and easy access to money as well as the availability of investment consultants.

Pitching to Consumer Base

Though the funds are managed through the private banking division, Citibank is promoting them for its entire consumer base. Citibank branches prominently display signs promoting the Landmark funds.

The bank started offering mutual funds in 1987. In April, it shifted 140 brokers of mutual funds and annuities to the bank's payroll from that of Landmark Financial Services, Oklahoma City. In doing so, the bank exercised an option in its original contract with Landmark.

"Banks that have a view of where they want to be and what kind of business they want to generate know that mutual funds have an important place as far as investment opportunities for the market," said Josie Ford, vice president of planning and marketing in private banking at Barclays Bank and president of the New York chapter of the Bank Marketing Association.

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