Skip to main content

Chuck’s Eggs, Beantown’s Basket

  • Author:
  • Updated:

In a last ditch attempt to prove to, well, everyone, that Citigroup shouldn’t be broken up, Chuck Prince is using a pilot program in Boston that he hopes will lead to “more coordination among bankers” and, cue the menacing music, bigger profits (without major acquisitions). The program aims to use retail branches to lure customers who will then be able to make use of the bank’s other services (corporate cash-management, personal finance advising, etc). Bankers with wealthy clients in Boston are also being instructed to work with colleagues in New York to offer more “sophisticated financing services” that are not available in the Bay State.
One Smith Barney adviser has been placed in each retail branch up north, with Anne Greenwood, in the newly created position of “market leader” giving updates to Prince every few days. By the end of June, Citibank customers with checking accounts in Boston and a Smith Barney brokerage will see all of their information on one statement, a seemingly simple idea (“cross-selling”) but one that is being implemented by other banks (J.P. Morgan Chase & Co, Bank of America Corp, Wachovia Corp.) across the country, and will hopefully be a bottom-line money-maker for Citigroup.
There is a lot of pressure on Prince for this Bostonian Bacchanal to be successful. Obviously there are the frustrated investors, more than a bit ticked about Citigroup’s “lethargic” stock price, inflated cost structure and uninspiring financial results. Many believe that Edward Lampert, who bought 15 million Citigroup shares in May will try (with good cause) to light a spark under CP. For his part, it’s reassuring to know that Prince realized he doesn’t have “a magic wand” to make everything work and make everyone happy. We’re cautiously optimistic. A Citigroup associate we spoke to at Shake Shack told us he was able to wait the hour for his ‘Shroom burger because he’d taken the day off to interview at another bulge-bracket bank. We’re not saying, we’re just saying. (Citigroup's employees in Boston are probably hard at work, unable to wait 60 minutes at whatever B-town's Shack Shack equivalent is. Anna's Taqueria?)

Citigroup's New Frontier