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Things are not good when your new CEO’s priority number one is to “stop destroying our shareholders’ capital.” But The Wall Street Journal isn’t above kicking a bank when it’s down.
The latest weak point to be splashed on the cover of the C Section is Citi’s retail banking operation, which is still in the hands of one of Vikram Pandit’s cronies and which has the highest average deposits per branch of top lenders but which may or may not still keep track of customer accounts longhand. Plus, there’s this compelling anecdote in the lede:
Adam Greenfield has been a Citibank customer for 15 years, but he has grown frustrated with what he calls its poor service and “tone deaf” efforts to sell him new products.
After Mr. Greenfield’s account at the Citigroup unit was compromised late last year, he decided he had enough. Now, Mr. Greenfield, who runs an urban-design practice in Manhattan, is looking for a new bank.
“I never found that they particularly cared about me,” he said.
Unsurprisingly for a bank so “tone-deaf,” Citi was not interested in commenting on the experience of a single (soon-to-be-former) client.
But read on: There’s an antiquated computer system that won’t be upgraded until next year; some cutbacks in Massachusetts, Pennsylvania and Texas; and higher costs than at other retail banks. There’s also some evidence contrary to the thesis:
The unit earned $231 million in the fourth quarter, a 41% increase from the same period a year earlier but a 32% drop from the third quarter of 2012.
A Citibank spokeswoman said the North American retail bank has shown improvements in other ways.
It finished 2012 with the highest checking balances, the highest annualized checking growth and the lowest attrition in five years. Acquisition of new customers was the highest since 2009.
“We’re not where we want to be by any means, but we are making progress,” Ms. Stewart said in a recent interview.
No matter, say unnamed sources.
Now, the pressure is mounting on Ms. Stewart to deliver results, according to analysts and company insiders.
And the branches are so much less cozy than the WaMu sites that Chase took over.