gateway_el_salvador_news_citigroup_grabs_a_bigger

back to home

US financial services group Citi (NYSE: C) will focus on capturing a greater share of wallet of its customer bases in Central America, Citi Global Consumer Group CEO for Latin America Raúl Anaya told BNamericas. "Holding a greater share of customer business makes a difference, makes relationships much more stable and more productive," Anaya said.

This year, Citi expanded its footprint in Central America - where it handled some US$1bn in banking assets at end-2006 - by snapping up the main units of two regional financial services groups with a combined client base of 2.25mn and combined assets of US$6.6bn at the time of purchase.

Last March, the US firm closed the acquisition of a number of companies from Grupo Financiero Uno for an undisclosed sum. And this month, the company completed the purchase for US$1.51bn of almost all the subsidiaries of Grupo Cuscatlán from Panama-based Corporación UBCI, the subsidiaries' holding company. "The three businesses [Citi, Cuscatlán, Uno] are highly complementary as each specializes in different business segments," Anaya said. While Citi's portfolios are filled with corporate clients, Uno's units specialize in the credit card business and Cuscatlán has tapped the SME sector, he added. The group has not decided yet whether to merge and re-brand its new Central American acquisitions under a single name.

"For the moment, these institutions are operating separately, although they have the same shareholder [Citi] in common," Anaya said in reference to an eventual merger.

Last February, the New-York based firm decided to unite its businesses under the single Citi brand and its red arc logo, selling its red umbrella logo back to US insurance provider Travelers (NYSE: TRV). However, in Central America, Citi will make a final decision after analyzing results from market studies expected in the third quarter, said Anaya. In the past, Citi has sometimes opted to keep strong local brands such as Mexico's Grupo Financiero Banamex, the country's number two financial services group and Citi's biggest Latin American operation.

CLIENT IS KING

One of Citi's top priorities in upcoming months is to reevaluate its product offering in Central America so it can meet client needs better. The group will be dedicating its efforts to improving customer satisfaction and retention levels, Anaya said. "We believe this is great moment to boost client loyalty."

Citi will be analyzing how to leverage the strengths of the three businesses to offer a more complete range of products, according to the executive.

ROUTE TO THE TOP

Cuscatlán and Uno acquisitions gave Citi control over several companies in El Salvador, Guatemala, Nicaragua, Honduras, Costa Rica and Panama, which together are home to 42mn people, the vast majority of whom have no access to financial services. Citi has purchased banks, credit card issuers, stockbrokerage firms, leasing and factoring companies, insurance brokers, insurance companies and a pension fund manager. "We want to be the main financial group in Central America. Citi, Cuscatlán and Uno operations place us in a comfortable position to achieve this goal," Anaya said.

To this end, Citi still has a way to go since El Salvador is the only market where the firm now holds dominant positions in the banking, insurance and pension business thanks to the acquired Cuscatlán units. Banco Uno is a mid-size competitor in that country. Outside El Salvador, neither Cuscatlán nor Uno are large players as measured by assets in the countries where they operate. "Our intention is to grow in the six countries," Anaya said.

CLIENT IS KING

Citi will be analyzing how to leverage the strengths of the three businesses to offer a more complete range of products, according to the executive.

ROUTE TO THE TOP