Citibank, one of the major international banks, is the consumer banking arm of financial services giant Citigroup. Citibank was founded in 1812 as the City Bank of New York, later First National City Bank of New York. As of March 2010, Citigroup is the third largest bank holding company in the United States by total assets, after Bank of America and JPMorgan Chase.
Citibank has retail banking operations in more than 160 countries and territories around the world. More than half of its 1,400 offices are in the United States, mostly in New York City, Chicago, Los Angeles, the San Francisco Bay Area, Washington, D.C. and Miami. More recently, Citibank has expanded its operations in the Boston, Philadelphia, Houston, and Dallas metropolitan areas.
In addition to the standard banking transactions, Citibank offers insurance, credit cards and investment products. Their online services division is among the most successful in the field claiming about 15 million users.
As a result of the global financial crisis of 2008–2009 and huge losses in the value of its subprime mortgage assets, Citibank was rescued by the U.S. government under plans agreed for Citigroup. On November 23, 2008, in addition to initial aid of $25 billion, a further $25 billion was invested in the corporation together with guarantees for risky assets amounting to $306 billion. Since this time, Citibank has repaid its government loans in full.
The City Bank of New York was founded on June 16, 1812. The first president of the City Bank was the statesman and retired Colonel, Samuel Osgood, ownership and management of the bank was taken over by Moses Taylor, a protégé of John Jacob Astor and one of the giants of the business world in the 19th century. During Taylor’s ascendancy, the bank functioned largely as a treasury and finance center for Taylor’s own extensive business empire.
In 1863, the bank joined the U.S.’s new national banking system and became The National City Bank of New York. By 1868, it was considered one of the largest banks in the United States, and in 1897, it became the first major U.S. bank to establish a foreign department.
When the Federal Reserve Act allowed it,National City became the first U.S. national bank to open an overseas banking office when its branch in Buenos Aires, Argentina, was opened in 1914. Many of Citi’s present international offices are older; offices in London, Shanghai, Calcutta, and elsewhere were opened in 1901 and 1902 by the International Banking Corporation (IBC), a company chartered to conduct banking business outside the U.S., at that time an activity forbidden to U.S. national banks. In 1918, IBC became a wholly owned subsidiary and was subsequently merged into the bank. By 1919, the bank had become the first U.S. bank to have $1 billion in assets.
Charles E. Mitchell was elected president in 1921 and in 1929 was made chairman, a position he held until 1933. Under Mitchell the bank expanded rapidly and by 1930 had 100 branches in 23 countries outside the United States. The policies pursued by the bank under Mitchell’s leadership are seen by historical economists as one of the prime causes of the stock market crash of 1929, which led ultimately to the Great Depression. In 1933 a Senate committee, the Pecora Commission, investigated Mitchell for his part in tens of millions dollars in losses, excessive pay, and tax avoidance. Senator Carter Glass said of him: “Mitchell more than any 50 men is responsible for this stock crash.
On December 24, 1927, its headquarters in Buenos Aires, Argentina, were blown up by the Italian anarchist Severino Di Giovanni, in the frame of the international campaign supporting Sacco and Vanzetti.
In 1952, James Stillman Rockefeller was elected president and then chairman in 1959, serving until 1967. Stillman was a direct descendant of the Rockefeller family through the William Rockefeller (the brother of John D.) branch. In 1960, his second cousin, David Rockefeller, became president of Chase Manhattan Bank, National City’s long-time New York rival for dominance in the banking industry in the United States.
Following its merger with the First National Bank in 1955, the bank changed its name to The First National City Bank of New York, then shortened it to First National City Bank in 1962.
The company organically entered the leasing and credit card sectors, and its introduction of US dollar denominated certificates of deposit in London marked the first new negotiable instrument in the market since 1888. Later to become part of MasterCard, the bank introduced its First National City Charge Service credit card – popularly known as the “Everything Card” – in 1967.
In 1976, under the leadership of CEO Walter B. Wriston, First National City Bank (and its holding company First National City Corporation) was renamed Citibank, N.A. (and Citicorp, respectively). By that time, the bank had created its own “one-bank holding company” and had become a wholly owned subsidiary of that company, Citicorp (all shareholders of the bank had become shareholders of the new corporation, which became the bank’s sole owner).
The name change also helped to avoid confusion in Ohio with Cleveland-based National City Bank, though the two would never have any significant overlapping areas except for Citi credit cards being issued in the latter National City territory. (In addition, at the time of the name change to Citicorp, National City of Ohio was mostly a Cleveland-area bank and had not gone on its acquisition spree that it would later go on in the 1990s and 2000s.) Any possible name confusion had Citi not changed its name from National City eventually became completely moot when PNC Financial Services acquired the National City of Ohio in 2008 as a result of the subprime mortgage crisis.