Citigroup CEO upbeat on US consumer unit

New York, May 16: Citigroup Inc. Chief Executive Charles Prince, under shareholder pressure to improve results, said on Tuesday the bank's consumer business has turned the corner, and that he plans more acquisitions to fuel growth.

Speaking at a UBS financial services conference, Prince said he is eyeing billion to billion acquisitions to help the largest U.S. bank generate 60 percent of revenue outside the United States, up from last year's 43 percent.

Since being freed last April from a year-long Federal Reserve ban on mergers while it cleaned up ethics problems, Citigroup said it has made a dozen acquisitions. The largest was last month's purchase of a majority stake in Nikko Cordial Corp. valuing the Japanese brokerage at billion.

''I feel good. Company's doing great, and I think our plans and programs are really beginning to show through,'' Prince said.

He also said he is ''very cautiously optimistic'' about the long-struggling U.S. consumer unit, which includes branches, credit cards, and consumer finance, and boosted revenue 6 percent last quarter. ''It feels like it's turned,'' he said.

Citigroup shares rose 5 cents to .91 in afternoon trading.

''Get With The Program''

Prince faces pressure to generate faster growth and boost a share price up just 16 percent since he took over in October 2003. That lags gains of 30 percent for Bank of America Corp., 51 percent for JPMorgan Chase&Co. and 33 percent for the 24-member Philadelphia KBW Bank Index .BKX>.

Citigroup last month announced plans to cut 17,000 jobs, or 5 percent, to help slash spending by .58 billion. The bank is trying to reduce layers of management, technology and infrastructure, and distribute resources more efficiently.

''The vast majority of people I meet accept, embrace the notion that this is the right way to go forward,'' Prince said.

Those that don't, frankly, have to get out of the way. When people don't get with the program, they should leave.'' Citigroup is in the second year of a five-year plan to make its businesses in more than 100 countries work together better.

Last week, the bank launched an advertising campaign featuring its ''Citi'' moniker and the tagline ''Let's Get It Done.'' Prince acknowledged, though, that some customers may not notice much change in how they do business until the middle of 2008, when he would be nearing the end of his fifth year as chief executive.

''Each year, '06. '07, '08, '09, '10, we have very specific building blocks,'' Prince said. ''I'm very impatient, I wish it were tomorrow.... I think it will tip over in the middle of '08 in terms of how it feels for the customer set.''

Acquisitions

Among Citigroup's recent acquisitions are Nikko, Internet bank Egg, Central America's Grupo Cuscatlan, transaction services provider Bisys Group Inc. and hedge fund Old Lane Partners LP.

The bank also led a group that won control of China's Guangdong Development Bank for .1 billion, and paid a similar amount for a one-fifth stake in Turkey's Akbank.

''I am a big fan of putting a lot of bets on the table, not a single big bet,'' Prince said. ''I am not interested in owning 5 percent or 10 percent or 15 percent as a pure investment.'' Prince is also trying to bolster areas within Citigroup's corporate and investment bank that are ''basically not on the playing field,'' including commodities trading and prime brokerage. He said it was a mistake to quit both in the late 1990s, when Citigroup considered them too risky.

Reuters>