Citigroup can trace its roots in the UK back to setting up in 1902 of an office by Smith Barney, the US bank which merged with Salomon Brothers in 1997 and would later merger with Citi and Schroder in 2000. In the UK Citi employs 11,000 people and its most noted brand is the egg online bank.
As with all banks in the recent credit crisis Citi has had difficult times and globally reduced its headcount by 52,000. Citi plans to reduce its workforce down to 300,000 globally and it plans to sell off some of its less strategic business divisions.
In February 2010, Citi said it had eliminated $1.42 billion (£904 million) from technology and communications costs over 18 months, through dramatic changes to servers and storage, better system integration and processes, and the elimination of legacy software.
Don Callahan, Citi's chief administrative officer who reports to CEO Vikram Pandit, told CIO sister title Computerworld UK that the bank was moving forcefully to hit targets of slashing $3 billion from operational and technology costs by 2011. Plans were drawn up in May 2008, and cost reductions began to notice on the balance sheet at the start of last year.
The bank, until a few years ago one of the world's largest with $25 billion annual profits, has had a troubled recent history with subprime mortgages, and recorded a $1.6 billion loss for the year to 31 December. Supported by US taxpayer money in the wake of the financial crisis, it paid $20 billion back to the US government last year, contributing to a loss of $7.6 billion for the final quarter.
Callahan said that efficiency in operations and technology (O&T) was now "critical" to "the company's efforts to get fit." The technology targets represent around a fifth of overall cost cutting at the bank.
Citi was "well ahead of schedule" with the O&T savings, he said. "We intend to be one of the most efficient operators in our industry, and we have made and continue to make significant progress against that goal".
The bank had developed a "complex" IT setup by its own admissions, a result of the way it evolved into a mass of different businesses through acquisitions.
Callahan said that over recent months the "better" prioritisation of systems and processes, as well as the removal of redundant technology, were key steps in transforming Citi's IT operations. A focus on "working smarter" and integrating processes and systems was driving the change, he said, adding that "there is still much work to do".
The bank has been focusing on increasing "server, mainframe and storage utilisation". Alongside this, it is consolidating its datacentres and making better use of facilities, and reducing the array of applications it uses.
Processes are being standardised in a number of functions and regions, "where it makes sense to do so". There is also extensive work to improve hardware efficiency and system integration, and the bank sees that putting its various credit card businesses on a single IT software platform is a "high priority". It has also started work to standardise on a single platform for its banking services.
Around half of the £904 million savings so far are attributable to technology and facilities transformational work, and a quarter to the sale of Citi's Germany and Smith Barney businesses. This week, Barclays agreed to acquire Citi's Italian credit card business.
But large-scale redundancies have also contributed to the massive cost cuts. The 265,000 staff working across the group now represents some 58,000 fewer than a year ago. These steps and other "management decisions" represented a quarter of the operational cost cuts.
Callahan insisted Citi is "working to maintain service levels" across its business, during all the changes taking place. As the bank presses ahead with tough cost cutting, he said the technology changes were playing a vital part in its stabilisation.
In March 2010, CEO Pandit said:
"Citi today is fundamentally different from the company we inherited when I became CEO two years ago. The write downs Citi took during the financial crisis - together with concerns about the quality of some of our assets - led to questions about the Bank's financial condition. Now, as a result of the government's response to the crisis, our new team's focused strategy and the commitment of all our employees, I am pleased to say we are in a far different and much healthier position. Today, Citi is operating on a very strong foundation and is positioned to contribute to the economic recovery and generate sustained profitability for the benefit of all our stakeholders."
Global CIO at Citi Marty Lippert left the company in March 2009 after just eight months in the role, citing personal reasons.