Search results

The financial services sector is traditionally known for its focus on quick profits of “making the numbers,” but industry leaders are now waking up to the need for an ethical reputation. John Harker describes how Citigroup is taking a bottom‐up approach to building a culture of ethics and shared responsibility.

The case and supporting teaching note were developed through the use of secondary sources such as company documents and archives, news articles and academic publications.

Jane Fraser, Citigroup CEO and the first woman to lead a major Wall Street bank, found herself at a crossroads. Weeks prior to the company’s 2022 annual shareholder meeting, Citigroup announced it would provide reproductive health-care benefits to employees traveling out of state for an abortion. Prompted by legal developments that hinted at the potential for a widespread ban on abortions, the announcement resulted in threats from Republican lawmakers to change course or suffer financial consequences. Through the case, students explore the role of business and corporate leadership in response to controversial political issues, including the potential opportunities and threats.

The case is best-suited for management or other business students at the undergraduate or graduate/MBA level. The learning objectives of the case would fit well within any of the following courses: Corporate Social Responsibility (CSR)/Business and Society; Business Ethics and Decision-Making; and Strategic Management. Instructors should position the case after students have been introduced to the topic of corporate social responsibility, ethical decision-making and/or CEO activism.

This paper aims to examine how international banking groups manage their branding in the context of successive mergers and acquisitions. It seeks to review of a number of case histories in order to show that banking companies tend to evolve a multi‐tiered system for absorbing and rebranding acquisitions and it also seeks to present a general framework to guide future research and practice.

The banking industry has been undergoing major consolidation in recent years, with a number of global players emerging through successive mergers and acquisitions. These transactions vary in scale and location, from major mergers of large, equal‐sized international entities to acquisitions of smaller, local businesses in various countries all around the world. This paper brings together the literature on mergers and acquisitions, which mostly comes from economics and finance, with the marketing literature on branding and rebranding, to create a framework to help us to understand the management challenge of rebranding bank brands in this context. Citigroup and Crédit Agricole are used as a preliminary test of this framework.

This analysis suggests that the branding problem varies according to the size and international status of the acquisitive bank. Very large banks with international brands such as Citigroup tend to follow a branded house strategy where they impose their master brand on all acquisitions resulting in a further enhancement of scale and brand strength. However, this general strategy conceals a more complex, multi‐tiered approach with different types and sizes of acquisitions being rebranded in different ways. Regional players such as Crédit Agricole tend to opt for a house of brands strategy where their acquired companies retain their own name and brand franchise in local markets.

The framework presented here is entirely new and requires further testing. The evidence supplied here is interesting but preliminary and requires further validation.

Most banking companies nowadays become involved in mergers and acquisitions at some stage, and face the task of realigning their brands in the aftermath of these transactions. This paper provides a systematic framework backed up by empirical evidence to help them to make these decisions.

The paper addresses a critically important strategic issue that has not been addressed in any detail in the marketing literature. The paper provides preliminary research evidence and a framework to suggest hypotheses for further research.

Times are tough at present for Citigroup, the world’s largest bank. As if low market prices, eroded investor confidence and outstanding loans worth billions to the financially crippled Argentina are not enough, the shadow of federal and industry investigation hangs over this financial giant. Under suspicion is one Jack Grubman, an analyst with Saloman Smith Barney (SSB – a subsidiary of Citigroup), who is alleged to have knowingly given false recommendations to investors during the boom of the nineties. Grubman was one of the few analysts still recommending investors to buy Worldcom Inc. and Global Crossing right up to the bitter end.

The purpose of this paper is to determine if the US Treasury's at‐the‐market sales of 5.27 billion Citigroup shares in 2010 drove down the banks' share price. It attempts to use the evidence of Citigroup's stock returns to accept or reject competing hypotheses of larger stock sales.

The paper uses a geometric Brownian motion model to test if there were abnormal returns at various points in the US Treasury's highly publicized stock sale that lasted from 26 April to 6 December 2010.

There was a weakly significant drop in the stock price at the announcement of the sale and a weakly significant rise in the stock price just after it ended. This is evidence that the demand curve for the stock had a negative slope.

The evidence from this study will influence policy makers and investors in the upcoming privatizations of large bailed‐out firms such as American International Group, Ally Financial, Chrysler, and General Motors. The evidence indicates that slow at‐the‐market sales may temporarily depress stock prices more than quicker, underwritten secondary offerings. Patient investors may experience modest abnormal returns from providing liquidity to the US Treasury as it privatizes its holdings.

This is the only paper to study the stock price impacts of the US Treasury's liquidation of its 27 percent stake in Citigroup in 2010. Because the stock sales were delegated to a third party and highly publicized, unlike most other large stock sales, the Citigroup privatization is an unprecedented opportunity to test if the demand curve for common stocks is perfectly elastic.

This paper aims to analyze the impact of conjectural “too-big-to-fail” (TBTF) guarantees on big and small US financial institutions’ stock prices during the 2008-2009 banking crisis.

The paper analyzes shocks to stock market investors’ expectations of government aid to banks in distress and respective spillover effects using an event study approach. We focus on three major events in late 2008, namely, the Lehman bankruptcy, the Citigroup bailout and the first announcement of the Capital Purchase Program (CPP) by the US Government.

The authors found significant differences in market reactions to the respective events between small and large banks. For both the Lehman and the CPP event, abnormal returns on big banks’ stocks are negative, while small banks’ stocks tend to generate positive abnormal returns. In contrast, large banks strongly outperform small banks in the case of the Citigroup bailout. Results for a control group of non-financial firms indicate that this behavior may be specific to the banking industry. The authors observed significant spillover effects to both competitors and non-competitors of Lehman and Citigroup, and concluded that while the Lehman event shook the widely held belief in an implicit TBTF subsidy to large banks, the TBTF doctrine was reinstated shortly thereafter.

This paper shows that conjectural TBTF guarantees are priced in by equity investors. While government aid to large banks in distress may prevent negative effects on the stability of the financial system, it may also create negative externalities by putting small banks at a competitive disadvantage. The findings suggest that US and European regulators’ recent policy measures directed at establishing reliable bank resolution schemes should be a step in the right direction to level the playing field for small and large financial institutions.

This paper provides a perspective on the field of nonmarket strategy. It does not attempt to survey the literature but instead focuses on the substantive content of research in the field. The paper discusses the origins of the field and the roles of nonmarket strategy. The political economy framework is used and contrasted with the current form of the resource-based theory. The paper argues that research should focus on the firm level and argues that the strategy of self-regulation can be useful in reducing the likelihood of challenges from private and public politics. The political economy perspective is illustrated using three examples: (1) public politics: Uber, (2) private politics: Rainforest Action Network and Citigroup, and (3) integrated strategy and private and public politics: The Fast Food Campaign. The paper concludes with a discussion of research issues in theory, empirics, and normative assessment.

In this chapter we study the intra-group transactions between the parent bank and its foreign subsidiaries in European Union (EU) countries during the crisis. We use hand-collected data from annual statements on related party transaction and find that they may create a serious problem for the stability of the foreign banks’ subsidiaries. Moreover, as some of those subsidiary banks were large by assets in some of the member states the related party transactions with the parent bank created a serious threat to the host countries’ financial system stability. We attribute this transaction to the weak governance in foreign subsidiaries. We suggest improvements in governance as well as greater disclosure of related party transactions in bank holding companies in Europe.

Of the forty banks included in the world’s largest 500 firms, none operate on a global basis. All but one are heavily dependent on their home region, with an average of 78.3 percent of their sales being intra‐regional. The other bank is European owned but has a majority of its sales in North America, i.e. it is host‐region oriented. The insularity of the world’s largest banks is not a sector‐ specific factor only nine of the world’s 500 largest firms are global, and the vast majority are like the banks, home‐region based.

The European division of Citigroup’s Corporate and Investment Bank (CIB) has gone beyond activities such as conferences, awareness training and network building, to launch an effort focussed directly on tackling the obstacles to enhancing diversity and getting results. In March 2002 the division received a coveted Opportunity Now award for progress made to create an environment in which women can be successful. A CIB women’s conference the year before had highlighted issues critical to the CIB’s success in recruiting, hiring and promoting qualified women. The European operating committee made a commitment to sponsor action on these issues and asked Lynne Fisher, the newly appointed head of diversity, to take the lead.