Citibank's Branch Expansion Plan: No Miracle Yields Reality Check

January 24, 2008

On January 23, 2008, Citibank [C] announced it was cutting back on its branch expansion strategy and may sell some recently opened branches due to high costs and/or poor results. In May 2007, A & O Brief 2007-12 presented analysis and opinion on Citibank’s branch expansion strategy. The new twist was its “banker and broker” pilot that placed Smith Barney retail brokers inside a brand new Citibank branch. This pilot was launched in two “new” retail markets for Citibank: Boston and Philadelphia.

By mashing its retail bank and Smith Barney brokerage unit together in Boston (and Philadelphia) in a pilot program, Citigroup hoped that the units will generate revenues and profits for both Citibank and Smith Barney. Boston was considered the key market to validate this "new frontier" strategy. Mixing bankers and brokers was not a new strategy, but Citigroup had never committed to make the effort a strategic one.

What are the implications for Citibank’s future in retail banking? How can Citibank overcome its limitations in retail banking?

Read more to find out how to receive access to this and other A & O Briefs.