Citigroup Marches On By Lifting Card Market Share
The Age
Tuesday May 16, 2006
THE local outpost of Citigroup, the world's biggest bank, is increasing its share of the Australian banking market after making a record $332 million profit last year.
A 50 per cent jump on the previous year, the result was boosted by $87 million from a one-off sale of its insurance business to US insurance giant MetLife. But profits from continuing operations also grew a healthy 10.5 per cent to a record $201 milllion, as it closes in on the Australian banks.Les Matheson, Citigroup's head of Australian consumer banking, said the company had stolen market share in credit cards. "Cards is clearly one of our strengths. We are the largest cards issuer worldwide," he said. NAB group chief John Stewart last week said he was not concerned about losing market share in credit cards: "Why push it when it could be exactly the wrong time?" he said. Mr Matheson said Citigroup would be only too happy to take NAB's place as the fourth largest credit card issuer in Australia: "I think a (number) four in four years is a great goal."By targeting "mass affluent" individuals - with assets worth between $100,000 and $1 million - he said Citigroup could secure a growth rate 50 per cent above the market average.Citigroup has plans for further acquisitions. "We are always interested in acquiring businesses," Mr Matheson said. Three-quarters of Citigroup's revenue of $827.2 million last year came from its Citibank retail banking cards, mortgages and consumer finance. The remaining quarter came from corporate banking, including transactions, fixed income trading.The bumper profit result was less than expected by Citigroup, which is in dispute with Metlife over the final sale amount allocated to the businesses.Mr Matheson described the dispute as "actually a relatively typical process following a sale" that would be resolved by over the next six weeks.
© 2006 The Age
