Citibank Hiring I-Bankers and Adding Branches Despite Raised Eyebrows
Citi is apparently taking off the gloves following its announcement that second-quarter net income was up 24% from a year ago and 11% from the first quarter of the year, with net credit losses down 35% as well.
During a Citibank conference call with reporters, John C. Gerspach, Citigroup's chief financial officer said that "...there wasn't a lot of investing going on in 2008 and 2009," but that now, ", "We are in investment mode."
Back in March, Citibank said it meant to hire no less than 500 bankers and traders over the next two years to strengthen its securities business and make up the ground lost to its rivals during the financial crisis, with sources telling eFinancial News that Citi plans to ramp up on-campus recruiting as much as 75% this fall,
The company has been aggressive in private banking emerging markets, and is already the best-known American bank in Asia and Latin America, recruiter Richard Lipstein of Boyden Associates in New York, said at the time.
Citibank is saying essentially: "Critics be damned, we plan to expand."
"Despite an earful from Wall Street analysts, Citi executives say that after several years of cutting back on investment spending, they need to loosen their purse strings to make up lost ground," The New York Times reports.
"...For two and a half years, Vikram S. Pandit was forced to hunker down to fix Citigroup's troubled businesses and fend off the bank's critics in Washington," the Times reported. But following the latest earnings gains and announcement, that may be history:
"Citigroup has been hiring dozens of investment bankers, dialing up advertising and drawing up plans to add several hundred branches from Buenos Aires to Bucharest, including more than 200 in major cities across the United States.
According to the New York Times report, "Mr. Pandit has been successful shedding assets, improving risk management and severing the bank's ties with the federal government. His efforts, however, have not lifted Citi's share price. It has floundered since the completion of a reverse stock split in early May that took the price to around $45 from $4.50.
As of this posting, Citigroup was trading at around 37.60 a share.