Reed Says Citicorp Retains Its Ambitions for Europe
DUSSELDORF, Germany -- Citicorp will increase its activities in Europe after a period of consolidation, said chairman John S. Reed, who expects a return to strong profitability next year.
Speaking to German reporters on Sunday, Mr. Reed said the bank would be looking for takeover opportunities in five to seven years, concentrating on France and Italy.
Although Citicorp has pursued a global banking strategy, it has reportedly been considering sales of banks in France and Italy to shore up its capital.
Cost Cuts Are Proceeding
Mr. Reed said Citicorp would increase its profits, which totaled only $43 million in the second quarter of 1991 after sharp cuts in its costs. The company has already saved $1 billion of $1.5 billion in cutbacks agreed to by the board for 1991 and 1992, Mr. Reed said.
He said a name change of Citicorp's German retail bank, KKB Bank, to Citibank Privatkunden AG effective Sept. 30 is part of a harmonization in its European strategy.
It is investing 10 million marks in the move and hopes to double the number of customers at the German branches over the next five years.
Obstacles in East Germany
The bank has made little progress in the former East Germany, hindered by practical problems such as the lack of telephone lines and a lack of sites to locate branches.
Mr. Reed warned that with the decline in U.S. real estate prices, many banks and insurers would need to take write-downs on their property portfolios.
But he was optimistic that an agreement would soon be reached in talks on Brazilian and Argentine debt.