Industry Analysis Case Study

USA's Banking Industry's Growth Strategies: CitiGroup's Unconventional Wisdom

OR

Abstract:
CitiGroup pioneered big mergers and acquisitions in the US banking industry, and led the first round of big consolidations resulting in the formation of financial conglomerates. Transformational mergers occurred in the industry marking the beginning of an integrated approach for market expansion. After a halt in the mergers, the trend resurfaced with the big merger of Bank of America and Fleet Boston. However, this time CitiGroup stayed away from big mergers. Charles Prince, who took over as the new CEO, focused on growth strategy through acquisitions of small regional banks.

Pedagogical Objectives:

• To discuss the CitiGroup's contrarian approach, of pursuing slower growth through small- scale acquisitions
• To discuss the growth strategies of US banking firms and the possible threat to CitiGroup's position in the light of big mergers in the country.

Keywords :  US retail banking industry; Merger and acquisitions; Financial conglomerates; Financial supermarkets; Integrated selling; Cross-selling; Transformational mergers; Glass Steagall Act; Growth Strategies Case Study; Sandy Weill; Gramm-Leach-Bliley; Conflict of interests; Economies of scale; Economies of scope; Riegle-Neal Act; CitiGroup