Comprehensive SWOT Analysis of Citi – The Third-Largest Financial Service and Investment Banking Corporation

Quick Stats on Citi

Founder	Sanford Well, Samuel Osgood
Year Founded	1998
Origin	New York
No. of Employees	210,000
Company Type	Public
Market Cap	$ 133.02 Billion (2021)
Annual Revenue	$ 74.3 Billion (2020)
Net Income/ Profit	$ 11 Billion (2020)

 

Current News About Citi

• CitiGroup’s profit fell 36% in the second quarter ending June 30, 2023. The profit was weighed down by higher costs for layoffs and increased provisions for credit losses, primarily due to the struggling trading division on Wall Street.
• Citi India transferred the ownership of its consumer banking business to Axis Bank Limited on 1st March 2023. Axis Bank completed its acquisition for INR.11,603 crores. The sale includes credit cards, retail banking, wealth management, and consumer loans, as well as the transfer of approximately 3200 Citi employees.

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SWOT Analysis of Citi

Talking about Citi’s business, let’s understand how this corporation can cater to different individuals using SWOT analysis. SWOT analysis of Citi helps us to understand companies through the lens of internal and external factors. Strength and weakness are based on internal factors whereas opportunities and threats rely on external factors of the bank.

Below is a step-by-step detailed guide to help you with the SWOT analysis of Citi.

Strengths of Citi

Strengths refer to those factors which help a company to have a slight edge over its competitors.

• Brand Reputation: Citi has been in the business of banking for a large number of years. Also, with the variety of products and services it provides, it is established as a leader in the industry. This helps the corporation to gain a reputation and get recognized easily.
• Automation: The company has a well-established IT system that helps ensure efficiency in its internal and external operations. Also, with the advancements in technology, it has automated various stages of production, leading to reducing its cost. This helps maintain the quality of products and services.
• Product Portfolio: Citi’s portfolio includes a large range of product offerings in different categories, keeping in mind its customer base and target markets.
• Social Media Presence: With the changing dynamics of business, Citi has been able to create a strong presence on social media having more than millions of followers on social platforms. Want to know how social media works as a strength for Citi? Then you must check out the benefits of social media marketing to get the answer to your query. 
• Skilled Labour Force: Citi continues to hire employees with higher qualifications all over the globe. This helps the company to be ahead of the competition. Also, it has invested in the training and development of its employees.
• The leading Issuer of Credit Cards Globally: One of the biggest roleplays that allowed Citi to establish itself as a leader is due to its facility of issuing credit cards.

Weaknesses of Citi

Weaknesses are the pain points that can affect the company, in the following ways.

• Lower Employee Retention Rates: Citi has been facing higher employee turnover, which means many employees leave. The downfall of this is, that the company has to invest large sums of money into the training and development of its employees
• Fluctuating Market Share: Citi’s product portfolio has some products that have a higher market share, while many have lower market shares. This creates a disparity in the portfolio, which makes it vulnerable to threats from competitors, new entrants, etc
• Centralized Decision Making: Every decision taken in the corporation has to be centrally approved by the officials which leads to lesser efficiency in its operations and delays in work schedules.
• Cash Flow Problems: Cash is necessary for running day-to-day operations and emergencies. But, the problem occurs when there is a lack of financial planning involving cash flows. This can lead to unplanned borrowing and increasing costs.
• Lower Current Ratio: There occurs a problem in the current ratio where there are more liabilities than available assets. This leads to a mismatch in the financials of the company.

Opportunities for Citi

In the market, there also exist many opportunities through which a company can grow. Some of them are listed as.

• Increasing Income: Increasing disposable income with the consumers leads to an increase in consumer spending. This can create demand for Citi’s products and services.
• Demographics: The population is always growing and it always shows a positive rate in the coming future. It helps companies to create new target markets for their products and services.
• Lower Interest Rates: Interest rates are getting lowered compared to previous years which allows considering expansion that involves finances with loans at a cheaper rate.
• Increased Globalisation: Increasing globalization gives the option of entering new markets. It also reduces trade barriers and aids in increasing operations.
• Technological Advancement: Technology has boosted the economy in many ways. It helps in automating the processes to reduce costs. It brings numerous benefits to many departments. One major benefit of technology is better data collection and market research.

Threats to Citi

Threats are the factors that usually no one has complete control over. Here we can only try to minimize them, including

• New Entrants: There will always be newbies entering the market. Some may also come up with great solutions to existing problems, which lead to loss of the market share of existing companies.
• Fluctuating Exchange Rates: When the business is operating in many nations, there is always a threat of fluctuating exchange rates. It impacts Citi, as it has sales internationally, while the suppliers are always local.
• Increased Marketing Efforts: Due to the rise of digital marketing, there is an increasing number of promotional messages that are being sent by competitors. It clutters up the space, which leads to losing out on customers. You must also be well-versed with a variety of digital marketing skills to get ahead of the competition.
• Political Instability: There are always changing regulations in different nations. It exposes changes in trade regulations and requires compliance by the companies.

Example of a Failed Campaign or Backlash from viewers:

• One of Citi’s blunders was neglecting to inform minority mortgage applicants that they were eligible for lower interest rates if they had other accounts with the bank. To compensate consumers, it spent $24 million in 2019.
• Regulators also discovered that the bank had failed to follow a federal regulation requiring lenders to guarantee that owners of properties exposed to floods have insurance if the premises were used as collateral for at least six years. Citi unintentionally sent $900 million to the incorrect people just before authorities responded in October, a humiliating blunder that put it in court.

Top 5 Competitors of Citi

• JP Morgan Chase & Co.: It is headquartered in New York City and incorporated in Delaware, is an American global and universal bank and financial services corporation. As of 2023, it is the largest bank in the United States and the world’s largest bank by market capitalization.
• Bank of America Corporation: It is a worldwide American investment bank and financial services holding firm headquartered in Charlotte, North Carolina, with investment banking and auxiliary headquarters in Manhattan. San Francisco, California, is where the bank was created. It is the second-largest bank in the United States, behind JPMorgan Chase, and the world’s second-largest bank by market value.
• Wells Fargo & Co.: It is a multinational financial services firm headquartered in the United States with a major global presence. The corporation is present in 35 countries and services more than 70 million clients globally. According to the Financial Stability Board, it is a systemically significant financial institution, and it is one of the “Big Four Banks” in the United States, along with JPMorgan Chase, Bank of America, and Citigroup.
• Goldman Sachs Group Inc: It is a worldwide investment bank and financial services firm based in New York City. Goldman Sachs was founded in 1869 and is located in Lower Manhattan, New York City. Goldman Sachs is the world’s second-biggest investment bank by revenue and ranks 55th on the Fortune 500 list of the top firms in the United States by total revenue.
• Morgan Stanley: It is a worldwide investment bank and financial services firm located in Midtown Manhattan, New York City, at 1585 Broadway. The firm’s clientele includes organizations, governments, institutions, and people, and it has offices in 41 countries and over 75,000 workers. Morgan Stanley was rated 61st on the 2021 Fortune 500 ranking of the top firms in the United States by total revenue.