Citigroup Inc Chief Executive Officer Vikram Pandit, who for the past two years has championed the US bank’s “globality,” may be getting a new mantra: locality.
Citigroup, which claims 2,500 of the world’s 3,000 largest corporations as clients, now says it also is targeting US companies with less than $20 million of annual sales, and plans to hire about 200 bankers by the end of 2011 to court them. That would bring the number of small-business bankers to about 500, or one for every two North American branches.
“It’s a renewed focus for us,” Raj Seshadri, 45, head of small-business banking for New York-based Citigroup, said in an interview. “We feel we can help business owners and the economic recovery, and there’s money to be made for our shareholders.”
Citigroup employed about 258,000 people as of September 30. Expanding the bank’s focus to include doctors, restaurants and cabinet makers alongside Coca-Cola Co. and wealthy individuals won’t be easy, says Randy Dennis, president of Little Rock, Arkansas-based DD&F Consulting Group, which advises banks with less than $15 billion of assets on risk management and business strategies.
“You’re going to have inventory loans, you’re going to have floorplan financing for different types of dealerships, you’re going to have receivables lending, you’re going to have lines of credit for businesses to make payroll,” Dennis said.
“It’s totally different, and it requires a great deal of monitoring.”
Big banks, small firms
The four largest US banks, which also include Bank of America Corporation, JPMorgan Chase & Co and Wells Fargo & Co, have been criticized by some entrepreneurs for tightening credit to small businesses after taking a combined $140 billion of federal bailout money. A record 41 per cent of small business owners say they can’t get adequate financing, an increase from 22 per cent two years ago, according to a July report from the National Small Business Association.
President Barack Obama in September signed the Small Business Jobs Act, creating a $30 billion program to help community banks make more loans to small companies. “When our small businesses don’t do well, America doesn’t do well,” Obama said last month after touring Woonsocket, Rhode Island-based American Cord & Webbing Co, which makes cords and fasteners.