Citibank 2011 Annual Report Download - page 10

Letter to Shareholders
8
investments in our infrastructure. Our institutional and
consumer businesses were burdened with a patchwork of
outdated, often overlapping and even redundant technology
systems that needed to be replaced. During the crisis, we
deferred many important initiatives but now must focus on
making our bank more efficient and nimble.
Many of these investments, such as nearly $1 billion in 2011 to
meet regulatory requirements, are not discretionary. Some,
such as building a common technology platform for our
global consumer business, are vital to improving the customer
experience globally. Investments in our North America
cards business grew by more than $500 million last year —
a necessary effort to get us back into a position to take on
our peers head-to-head. Similarly, in fast-growing emerging
markets where standing still risks losing share, we had to
invest just to keep up. Investments to grow the client
franchise in Asia and Latin America rose by approximately
$300 million.
We intend to reduce our expenses in 2012 compared with 2011
levels (assuming no changes in FX or significant one-time
charges). We also will continue to right-size our businesses for
the opportunities we see so that we are prepared whether the
current environment proves to be the result of a cyclical or
secular trend.
Progress on Our Priorities
Despite the challenging environment, in 2011 we still were able
to make progress on all of the execution priorities I outlined in
last year’s letter.
Our intense focus on capturing emerging market trade and
capital flows yielded some impressive achievements over the
past year. Citi’s loans to companies in the emerging markets
grew by 34% from 2010 to 2011. Among the many deals we
concluded in the emerging markets in 2011, Citi was the lead
underwriter on the $3.7 billion capital-raising for Russian
telecommunications company VimpelCom. This was the
largest capital markets financing exercise ever for a private
sector company in Russia. And Citi acted as exclusive advisor
to Japanese beverage company Kirin on its $2.6 billion
acquisition of Schincariol in August 2011 — the second-largest
Japanese acquisition in Latin America ever.
To further our ongoing initiative to become the world’s digital
bank, we were proud to be awarded a global mandate from
one of Citi’s largest clients to conduct online and mobile
receivables and payments. Three key businesses — Global
Enterprise Payments, Global Consumer Banking and GTS —
worked seamlessly together across every region to make this
happen. While the details of the mandate are being finalized,
this new project promises to be applicable across a range
of clients and industries. We’re also innovating with other
partners — including telecoms, start-ups and other players
in the ecosystem — to help shape mobile payments around
the globe. In May, Citi served as the lead bank on the U.S.
launch of Google Wallet, which offers the latest smartphone
payment technology. Mobile payment pilot systems are
under way in Asia and Latin America, and several others
are being negotiated.
I’m particularly proud of the progress we’ve made in
enhancing the customer experience at our bank. In 2011, we
opened new Citi Smart Banking branches in Washington, D.C.,
Tokyo and Busan, South Korea. We also opened five innovative
sales and service centers in Moscow and St. Petersburg plus
130 Citi Express locations — innovative 24-hour service units
— in Colombia. We opened branches in three new markets in
China, expanding our presence in that country to 13 cities.
And, in direct response to customer feedback, in the U.S. we
introduced the Citi Simplicity® credit card, whose benefits are
unique and industry-leading: one APR, a single rate and no
late fees.
Over the past 12 months, Global Consumer Banking also has
introduced or refined digital banking options at an exceptional
pace to meet or exceed those demands and continue Citi’s
evolution as the world’s premier digital bank. I don’t have the
space here to list even half of our many accomplishments, but
in July, we launched a consumer banking app designed for the
iPad®. We also made major headway in the development of
new customer applications for Facebook and Amazon’s Kindle
Fire, as well as mobile person-to-person payment capabilities,