Citibank 2006 Annual Report Download - page 6

We’ve come a long way in the last few years. I feel very good about the progress we’re making.
We’re growing our franchise in a more balanced way, with a greater focus on organic growth
around the world. We’re integrating our businesses and working to provide one face to our clients.
Clearly, we have plenty of work to do but we are on a path to stable, long-term growth.
Dear Shareholders,
Investing for Our Future
Citi is now on its way to becoming the company we want
it to be, that is, a company that grows by serving clients
better…a company agile enough to take advantage of oppor-
tunities anywhere in the world...and a company that acts
responsibly, with employees who are proud to work here.
In last year’s letter to you, I talked about our strategic
priorities and how important it is to invest for our
future—by expanding our distribution globally, leveraging
our organization-wide capabilities across businesses and
geographies, integrating our technology toward a common
platform to serve clients better, and operating day-to-day as
one company.
We made important strides on these strategic goals in 2006,
which included:
Widening our reach
• Launched our e-banking business, Citibank Direct, which
generated close to $10 billion in deposits
• Partnered with 7-Eleven®, adding 5,500 ATMs through-
out the United States; expanded our Cards partner
programs to reach more than 80,000 locations in North
America, and expanded our presence in 37 countries
• Launched Direct Custody and Clearing services in fi ve
new countries
Connecting our businesses
• Made progress in bringing the power of one Citi to our
Citi Smith Barney, Citibank, CitiMortgage, Citi Cards,
and Student Loan clients by offering a broader array of
products—retail banking, commercial lending, mortgages,
investments—through pilot programs in our Boston and
Philadelphia Financial Centers; based on the results, we
will refi ne the model for further expansion across the
United States
• Rolled out Bank at Work to eight new countries (see
page 12)
• Launched a pilot where select CitiFinancial branches offer
Citibank products
Using technology to better serve clients and lower costs
• Introduced the world’s fi rst biometric credit card service in
Singapore (see page 8) and biometric ATMs in India
• Cut costs by reducing the number of data centers by 20
percent globally
• Leveraged our call centers by having our service represen-
tatives not only serve, but offer products to, clients
Allocating capital effectively
• Acquired strategically important stakes in Housing
Development Finance Corporation Limited (12.3%),
Akbank (20%), and Guangdong Development Bank
(20%); and announced the acquisitions of Grupo
Financiero Uno, Grupo Cuscatlán (see page 14), Quilter,
and, early in 2007, ABN AMRO Mortgage Group, and
Egg Banking plc
• Returned approximately $17 billion in capital to our owners
• Received Moody’s upgrade of Citibank, N.A. to Aaa, a
rating that few fi nancial institutions can claim; and early in
2007 received upgrades from Standard & Poor’s—raising its
credit rating on Citigroup Inc. to AA/A-1+ and also raising
the ratings on Citibank, N.A. to AA+
These were just a few of the steps we took in 2006, impor-
tant progress points. We still have quite a way to go, but
we will continue to expand on many of these and other
activities in 2007.
Our Priorities for 2007
We have three clear objectives for this year:
Grow U.S. Consumer—We’re working to generate better
growth in U.S. Consumer by broadening our product set and
expanding our reach. We’re also in the second year of a fi ve-
year plan to implement a common technology platform that
will enable us to serve our U.S. Consumer clients in a seam-
less fashion as we grow our relationships with them.
Grow International—The goal is to focus more of our
activities outside the United States, where the opportunities
for growth are greatest. We’re doing that by, among other
activities, opening branches in key markets—approximately
70 percent of our new branches have been in the emerging
markets. We are also making targeted acquisitions that fi ll
gaps—for example, Egg Banking plc, the world’s largest pure
online bank and one of the United Kingdom’s leading
online fi nancial services providers; and broadening our
product capabilities in our Markets and Banking business.
Improve How We Operate—While controlling our
expenses is central to all we want to accomplish in 2007 and
beyond, we want to do more than merely squeeze costs out
of what we do now. A fundamental objective is to improve
the way we operate—to rethink what we do and how we
do it. During the fi rst quarter of 2007, we took a compre-
hensive look at the structure of our expense base. We are
eliminating layers of activity that clog up the system, and this
will free up the organization—making us leaner, more agile,
and more effective—enabling us to grow revenues faster and
enhancing service to our clients.
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