As debate on the renewal of the Bank of the United States charter continued into 1811, some New York merchants who were aligned with U.S. President James Madison applied to set up a new bank. Noting that it was easier to do banking in Philadelphia, Boston, and Baltimore than in New York, they petitioned the state assembly on February 11, "praying to be incorporated as a banking company." They had to wait over a year to see their wishes fulfilled. The first setback came on March 22. Vice President George Clinton's faction in the state assembly defeated the petition. When it reconvened in 1812, the assembly then faced petitions for the establishment of two more banks from merchants aligned with Clinton and associates of the former Bank of the United States. Enter one Samuel Osgood, elder statesman. He had a plan. The state lawmakers would support the original petition from 1811. He himself would be appointed president of the new bank. The original merchants aligned with Madison would secure half the remaining seats on the board, while the rest would go to the new group of merchants who supported Clinton. Now with broader backing, the charter sailed through the state assembly and, on June 16, 1812, City Bank of New York came into existence. Though Clinton had died of a heart attack three months earlier, his supporters now controlled almost half of the board of the new bank in his home state. With the passing of the charter, the 200-year story of Citibank began.

In 1811, a group of merchants takes the first steps towards setting up a new bank to help New York compete with rivals Philadelphia, Boston, and Baltimore

A new bank born in New York

From 1812 to 1814 the United States and Britain were at war. Congress had declared hostilities in 1812 following tensions with Britain over America's trade with France. In the summer of 1814, British troops captured Washington D.C., the nation's new capital. They set fire to several public buildings, including the White House and the Capitol. The backdrop to these dramatic events was the French Emperor Napoleon's vision of his country's global dominance, which was defeated - at least temporarily - at the hands of Britain and its coalition partners Austria, Prussia, and Russia in the spring of 1814. Napoleon's forced abdication and brief exile to the Mediterranean island of Elba strengthened the position of Britain, which was able to divert increased resources to the conflict across the Atlantic (Napoleon escaped from Elba, to be finally defeated at the Battle of Waterloo in 1815).
During the war, the United States' currency and treasury bills were losing value, trade was languishing and businesses failing. In mid-July, City Bank of New York appointed a committee of directors to "make proper arrangements for the removal of the books, cash etc., belonging to the bank, in case of the invasion of the city by the enemy." A separate committee comprising William Irving, John Swartwout, and Samuel Tooker was later set up to cooperate with other banks and "prevent the export of specie to the enemy."
Following the British invasion of Washington, New York City's banks suspended gold and silver payments on August 31, a day after banks in Philadelphia did the same. As hostilities began winding down towards the end of 1814, City Bank lent the federal government $200,000 to help it meet interest and amortization payments on its debt. The bank had already lent $500,000 to the underwriter of a government bond issue earlier in the year and had also subscribed to war bonds in 1813. In exchange, it was designated as a government depository, receiving a third of all federal balances held in New York.

City Bank is rewarded for helping finance the U.S. government's effort in the War of 1812 against Britain

Bank wins depository status

Many of the bank&rsquo;s early leaders were significant figures in the New York merchant economy. Quaker merchant Isaac Wright, a one-time board director and bank president, was a leading importer of British textiles. He founded the Black Ball Shipping Line, which was believed to be the first regular packet line service between New York and Liverpool. Benjamin Marshall, his partner in the shipping line, joined the board as well. &nbsp;

Quaker merchant Isaac Wright, a one-time board director and bank president, was a leading importer of British textiles. He founded the Black Ball Shipping Line.

Quaker mariners at the helm

City Bank, the eighth-oldest bank in New York, and thus designated no. 8 in the clearing house, was well placed to shield clients during panics. Under Moses Taylor (bank President from 1856 to 1882) the bank became a vehicle for monitoring and controlling the companies that made up his industrial empire. For deposits, all companies had to keep their principal account with City Bank. In exchange, the bank would extend short-term credits to them as needed. By taking deposits from those with temporary cash surpluses and lending to those with temporary deficits, Taylor was fulfilling the treasury functions of the bank he controlled. It was a provider of liquidity at all times to himself and his companies, the bank's clients. The bank adopted a policy of "ready money," stressing liquidity and investing in call loans as a secondary reserve. It avoided volatile sources of funds. Taylor ran the bank so conservatively, by keeping large amounts of surplus cash, that City Bank was consistently able to fund its clients even during the financial panics that afflicted Wall Street. Clients were shielded from insolvency, and the bank itself was protected from possible failure. It was this conservative policy that made City Bank of New York one of the strongest of the city's banks in the second half of the 19th century. The bank's deposits rose in each of the financial panics during this period, while the average deposits of New York's other banks fell.

City Bank, the eighth-oldest bank in New York, and thus designated no. 8 in the clearing house, was well placed to shield clients during panics.

City Bank, provider of liquidity

In July 1865, City Bank converted its state charter to a national one, taking on the new name of National City Bank of New York. This prestigious designation demonstrated that the bank met the federal government&rsquo;s higher standards of solvency and liquidity and enabled the bank to become a depository for the federal government and required reserves of national banks in other cities.&nbsp;
National City Bank of New York was the bank&rsquo;s name for close to a century and it became one of the most recognizable names in banking around the world. With the capacity to offer a broader range of services, this marked a pivotal step in the bank&rsquo;s transformation into the Citi of today. &nbsp;

In July 1865, City Bank converted its state charter to a national one, taking on the new name of National City Bank of New York.

A banker’s bank: National charter and expansion of services

Moses Taylor was one of the original investors in the New York, Newfoundland, and London Telegraph Co., founded in 1854 by Cyrus West Field, a successful young businessman who is credited with laying the first transatlantic cable. Taylor was treasurer of the new company and a director. The first cable was completed in 1858 but soon broke down. After interruptions caused by the Civil War between 1861 and 1865, three more unsuccessful attempts were made. The company finally succeeded on the fourth attempt, in 1866, bringing New York into virtually instant communication with London. Field and his associates also founded American Telegraph Co. - this became the biggest telegraph operator in the East, with lines from Maine to Louisiana. Its only major rival was the Western Union Telegraph Co., which was growing its network westward to the Pacific, centered on the Mississippi Valley. Western Union later merged with American Telegraph, giving it a dominant role at the American end of the transatlantic cable. After the merger, Taylor became a Western Union director, a position he would hold for the rest of his life.

Moses Taylor was one of the original investors in the New York, Newfoundland, and London Telegraph Co., founded in 1854 by Cyrus West Field, a successful young businessman who is credited with laying the first transatlantic cable. 

Transatlantic Cable

In 1882, when Moses Taylor died, the customer base of National City Bank consisted largely of companies such as sugar merchants, cotton brokers, coal mines, gas utilities, and southern railroad companies. In the general character of its business, the bank was not very different from its major competitors. It also looked after the fortunes of railroad baron Cornelius Vanderbilt and, especially, Taylor himself. Yet, it was still relatively small.When James Stillman became president after Percy Pyne's resignation in 1891, it had only three officers (the president himself and two cashiers) and a handful of staff. Under Stillman the bank continued to function as a treasury for companies in the Taylor empire, and he began using the bank to support his own business activities through Union Investment Co. After Union Pacific Railway went into receivership in 1893, National City Bank seized a chance to break into the big league of investment banking. When an attempt to recapitalize Union Pacific was abandoned amid political uncertainties, the task then fell to Jacob Schiff, of investment bank Kuhn, Loeb and Co. Schiff turned to Stillman to help out on the commercial banking side. To cover the costs of the Union Pacific workout, Stillman committed $200,000 of his own funds to an initial bond issue raising $10.5 million, while National City Bank itself subscribed to $250,000 in a subsequent issue for $3.5 million to meet coupon payments on Union Pacific bonds. Overall, Schiff and Stillman arranged nine bond issues, underwritten by Kuhn, Loeb and Co. to raise $105 million over the subsequent three years. Stillman's personal investment in these bond issues amounted to $5.8 million, which was even more than the $3.6 million committed by stockbroker and railroad investor Edward. H. Harriman and almost as much as the $6.5 million subscribed to by Kuhn, Loeb. National City Bank invested $1.8 million and acted as agent to transfer the funds to government.

A railroad refinancing opens up new strategic opportunities

National City Bank forges investment bank alliance

By the end of the 1800s, some of the large corporate clients of National City Bank conducted much of their business outside the United States. Among them were Standard Oil (particularly strong in China) and American Sugar Refining. In response to their needs, in 1897 the bank opened a foreign exchange department, offering to buy and sell drafts, make cable transfers and collections, and issue travelers' letters of credit. This was a relatively new type of business in the United States. Against this background there was growing European investor interest in dollar-denominated stocks and bonds, especially in London but also in Berlin, Amsterdam, and Brussels. As to capital markets, National City Bank acknowledged that London was still the undisputed leader, notwithstanding the growing importance of the New York, Paris, and Berlin bourses. One of the first big transactions of the new foreign exchange department came in 1899, when the bank received a $5-million deposit from the United States Treasury. This amount was to be credited to Spain as part of a $20-million payment for the Philippines under the treaty ending the Spanish-American War. By 1912, National City Bank had correspondent banking relationships with 132 banks worldwide and deposits with them amounting to $6 million. The foreign exchange department drew many recruits from Europe. In 1907, there were individuals from Austria, Germany, the Netherlands, and Poland. Departmental manager John Gardin had noted that in Europe even messenger boys had to have completed high school or at least graduated from a commercial college before being employed by a bank. They had to be fluent in at least one foreign language and be prepared to work for no pay at all for the first three or four years. "The men come out of their apprenticeship with a thorough business education, well fitted to the battle of life," he wrote. According to Gardin, Americans considering a career in foreign exchange needed a broad world view. They had to be "acquainted with ethnological conditions the world over," he said, with "a knowledge of political events, throughout the universe, besides a certain skill in mathematics, reaching far beyond the multiplication table."

Foreign business requires a new kind of service; correspondent links forged overseas

New forex department for clients with operations abroad

The International Banking Corporation (IBC) was founded in Connecticut in 1901 by a group of businessmen seeking to promote trade with Asia following America's acquisition of the Philippines from Spain. The bank's state charter allowed it to do business anywhere except Connecticut. The founding president was Marcellus Hartley, owner of the Remington Arms Co. Other directors included corporate lawyer Thomas Hubbard, investment bankers Jules Bache and William Salomon, along with representatives of the Equitable and Metropolitan insurance companies. Hubbard, who had previously worked as financial officer for Southern Pacific Railway, assumed the presidency following Marcellus Hartley's death in early 1902. After opening a branch in London in April 1902, IBC established branches in rapid succession in Shanghai, Singapore, Manila, Yokohama, and Hong Kong. It also hired two traders from Deutsche Bank to develop its foreign exchange business in New York. By 1904, the Asian network had spread to Calcutta and Bombay, Kobe, Guangzhou, and Cebu. Additional branches were established in the Chinese cities of Beijing and Hankou in 1909. More followed in 1918 (Java, today part of Indonesia) and 1919 (Burma and China), and others later in China and Japan. IBC was a commercial bank. A large part of its success in China rested on maintaining a close relationship with multinationals operating in China, such as American Trading, Shanghai Telephone, Standard Oil, and British American Tobacco. It received the US government's special encouragement and support, which allowed it to broaden its branch network in the region and begin expanding its business. IBC's business originated with the local subsidiaries of the bank's corporate clients, rather than with their U.S. headquarters. Much of IBC's business was trade-related, such as financing exports of raw silk and tea from China and Japan, cotton and jute from India, and tin and rubber from Singapore. From the Philippines came exports of hemp, copra, sugar, tobacco, and coconut oil. IBC was also involved in the import trade, financing Chinese imports of silver from the United States as well as Japanese imports of cotton from India and wool from Australia. The 19th century had seen a flow of Chinese immigrants to the United States. They worked on the construction of the railroads, and they were a source of labor for agriculture and many industries. Their remittances were an important source of foreign exchange for China, and many of them flowed through the IBC branch in San Francisco. In 1915 National City Bank acquired a majority interest in IBC and fully acquired the company in 1919.

A Connecticut state-chartered bank caters to companies doing business in the Far East

IBC pioneers trade finance in Asia

In 1903, Panama broke away from Colombia and became an independent state under U.S. protection. As part of this arrangement the United States took over the work on the Panama Canal, which had begun in the 1880s. On August 17, 1904, at the U.S. government's request, IBC opened a branch in Panama City, followed two years later by one in Col&oacute;n, on the Atlantic side of the young country. IBC provided financing for Panamanian development and banking services for firms working on canal-related business. By 1916, the Panama Canal was in uninterrupted operation and international shipping provided a new client base for financial institutions.

 On August 17, 1904, at the U.S. government's request, IBC opened a branch in Panama City, followed two years later by one in Colón, on the Atlantic side of the young country. 

New opening in Panama

In 1911, National City Bank set up an investment affiliate. It was modeled on the First Security Co. founded in 1908 by First National Bank, a blue- ribbon corporate bank which National City Bank acquired almost half a century later. The National City Company initially served as a holding company for stakes in other banks in New York, Philadelphia, Boston, Washington, Indianapolis, and Kansas City, as well as Cuba, where it had an interest in Banco de Habana. In 1916, the affiliate acquired Wall Street securities firm N.W. Halsey and Co. with branches in four cities on the U.S. East Coast and two in Europe. Over the next three years, the National City Company expanded significantly. By 1919, it employed more than 1,650 people in 31 cities. It had more than 10,000 miles of telegraph cables, including the first transcontinental wire to be used exclusively by an investment bank. In due course, the affiliate acquired the bank's own bond department, creating the foundation of a global securities firm. The investment bank developed strong sales and marketing teams, which adopted modern advertising techniques. Until then "it was considered almost unethical for bond dealers to seek business in ways approved by general merchandisers," the president of National City Company, Charles Mitchell, told trainees in 1919. Partly buoyed by the government drive to sell war bonds to the public in 1917, the National City Company began merchandising corporate bonds like any other daily household item. As Mitchell said, "we took from the experience of successful manufacturers and distributors those pages which had spelled success for them  lessons they had learned in advertising and publicity, and in industrial education." Mitchell praised the government for educating the public about investment during its campaigns to sell war bonds. "Government financing," he said, has provided a "liberal education for most people and materially benefited us." That education was partly thanks to National City Bank president Frank Vanderlip. Based on his experience in marketing Spanish-American war bonds for the Treasury, Vanderlip accepted a request by the New York Federal Reserve Bank that he should organize publicity for the first war-bond campaign in mid-1917.

The National City Company, an affiliate of the bank, breaks the stereotype and adopts modern methods in the sale of bonds

Bonds go to the masses

As World War I was breaking out in Europe, Argentina was enjoying a trade boom. National City Bank's first foreign outpost, the Buenos Aires branch, opened in late 1914, was almost immediately profitable thanks in part to a large foreign-exchange business. National City Bank established ties with Banco de la Naci&oacute;n Argentina, the largest bank in Argentina, and opened accounts with both U.S. corporate clients and local companies. A second foreign branch was established in Rio de Janeiro, Brazil, in April 1915, with a sub-branch in Santos, the coffee-trading center. A second Brazilian branch came a few months later, in S&atilde;o Paulo. It was followed by a branch in Montevideo, Uruguay, and another in Havana, Cuba, which acquired Banco de Habana, partly owned by National City Bank chairman James Stillman. In 1916, branches were opened in the Brazilian city of Salvador (Bahia), the country's sugar-trading center, and the Cuban city of Santiago. National City Bank then entered Chile, its fifth country in Latin America, with a branch in Valparaiso, the country's main port, linked by railroad to Buenos Aires in Argentina on the Atlantic coast. The sailing time from Valparaiso to New York by steamer had just been almost halved by the completion of the Panama Canal in 1914. National City Bank gradually expanded its regional footprint to include branches in Venezuela in 1917 (where the oil boom had attracted many international companies which required financial services), and Peru in 1920. Its affiliate from 1915, International Banking Corporation (IBC), meanwhile established its own branches in Colombia in 1916 and the Dominican Republic in 1917. In 1922, National City Bank also acquired a controlling interest in Banque Nationale de la R&eacute;publique Haiti.

National City Bank's first big push overseas reflects the growth in international trade as war breaks out in continental Europe

Business blooms in Latin America

In the early 1920s, National City Bank was making a conscious effort to build a retail business. The year 1921 saw the acquisition of the Commercial Exchange Bank, and three domestic branches as part of the bargain. One of these was the 42nd Street branch. Vice president Thomas Reynolds described the new approach to business there: "We are actively interested in individual accounts, balances of which average $500 or more, and are making a consistent effort to develop this type of business, along with the larger accounts that come from business houses." A second acquisition followed in the same year. The merger with Second National Bank, which was founded in 1863 and in which the Stillman family held a controlling interest, brought into the National City Bank network a branch at 28th Street and 5th Avenue. Second National Bank's core client base was the textile and other manufacturers located between 23rd and 34th streets. The year 1924 thus saw National City Bank represented by branches at 42nd Street and Madison Avenue; at 28th Street and 5th Avenue; at the Bowery branch; at 57th Street and 7th Avenue; and at 72nd Street and Amsterdam Avenue. The growth of the network did not stop there. Following a change in the law that allowed national banks to have full-service branches as long as they conformed to state law, by the end of 1929 National City Bank had 37 domestic branches in Manhattan, Brooklyn, Queens, and the Bronx, the fifth-largest domestic branch system in the country. Some of the branches were distinctive architecturally. The Art Deco-style former Canal Street/Broadway branch, which is still standing, was opened in 1927. It is not hard to see a family resemblance between this and its grander cousin in Buenos Aires, opened in 1929. Underlying this domestic expansion was the wish to offer every customer, in the words of the staff magazine Number Eight, "the same worldwide banking, investment and trust facilities that have been developed at Head Office, 55 Wall Street" and so make banking "as simple as buying a dress, a pair of gloves or a piece of furniture."

Through mergers, National City Bank acquires a number of branches and builds more, becoming a force in retail banking

The New York branch network expands

In 1933, the United States was struggling with its deepest economic downturn ever. Despite its size, National City Bank was not spared the massive runs on deposits that were taking place at banks across the country. According to James Perkins, who succeeded Charles Mitchell as the bank's chairman in 1933, average gross deposits fell from $1.26 billion in the week ending February 18 to $967 million in the week ending March 25. Speaking at the annual meeting of shareholders in early 1934, Perkins acknowledged that the situation had been "acute," but noted that by the end of 1933, deposits had partially recovered, to $1.12 billion. Four years after the 1929 crash, however, the Great Depression was still taking its toll on the bank. Operational systems had been reviewed, expenses had been reduced by more than $1.5 million, and executive salaries had been cut. Moreover, no management fund or other extra compensation plan for employees had been in place for three years. Since becoming chairman, Perkins had persuaded the board to set aside an additional $30 million as a contingency reserve and cut the dividend from the annual rate of $2 a share to $1 a share. Yet the bank was still profitable, especially the foreign branch network, which was maintained largely intact under Perkins' tenure. Perkins was not always a believer in overseas branches. During the bank moratorium of 1933, declared by President Roosevelt to prevent a bank run due to lack of public confidence, National City Bank's competitors predicted that the overseas branches would bleed the bank dry of funds. However, such was public trust in National City Bank, that during the closure in the United States the overseas branches showed a shrinkage of less than 2 percent in their deposits. One day, Joseph Durrell, head of the overseas division, showed a gloomy Perkins offers of assistance from friendly competitors, as well as the previous night's reserve sheets, indicating that the bank's cash balance abroad amounted to 73 percent of its branch deposits. At that moment, Perkins became a staunch supporter of the overseas division. Perkins reported, "Under anything like normal conditions the foreign branches make handsome earnings and contribute largely through their services to the building up of domestic deposits." Foreign exchange earnings were said to be particularly brisk in China, which used a silver rather than a gold standard for its currency and was largely shielded from the global downturn. Although the U.S. economy improved during the 1930s, it took more than a decade for the country's gross domestic product to return to its 1929 level.

The reassuring style of National City Bank's new chairman, James Perkins, suits the uncertain mood of the times

Banking in the Great Depression

The National City Bank business in France was one of the bank's more successful operations in Europe. Major U.S. clients of the Paris branch were Standard Oil, International Harvester, American Radiator and United States Lines. French clients included industrial companies in Lille and silk companies in Lyon. The main sources of income were commercial overdrafts, discounting trade bills, and foreign exchange. Harvey Gerry, who worked in both the Paris and Nice branches between 1931 and 1939, recalled that the bank was very competitive in this market. When German troops invaded France and advanced towards Paris in June 1940, the bank evacuated the branch and relocated to Le Puy, a small town in the mountains of south-central France, which was in the unoccupied zone. "Cash, securities, and files were transported in a truck," Gerry said. "Books, machines, and personnel were crowded into three other trucks." The trip took two days. Of 250 employees, about 50 found their way to Le Puy, where a new branch was set up at the Hotel Bristol, which also provided living quarters for much of the staff. Head office decided to liquidate the French business, although operations in Paris had to be partly resumed to contact those clients who were still in the occupied zone. After the bank had paid indemnities to employees and helped them find new jobs, the number of staff in Le Puy and Paris was progressively reduced to about 20 overall. Before two-way passes between the occupied and unoccupied zones were issued, Gerry recalled that one staff member was said to have crossed German lines in a mailbag.

The early stages of World War II pose challenges for Citibankers in Paris and London, as they face invasion and aerial bombardment

War returns to Europe

As increasing numbers of male staff entered military service, National City Bank started to recruit more women. Women were already working as secretaries, stenographers, typists, and bookkeepers. Mid-1941 saw the hiring of female messengers. After five or six months, female messengers could become junior clerks and study shorthand, typing, banking, and English under the supervision of the personnel department. At the end of 1942, financial incentives were offered for women to study at commercial night schools. The bank teamed up with IBM to offer courses in operating machines to the bank's bookkeeping trainees. By the end of 1942, women accounted for 43 percent of the bank's workforce of almost 10,000, up from 23 percent at the end of 1940.

By the end of 1942, women accounted for 43 percent of the bank's workforce of almost 10,000, up from 23 percent at the end of 1940.

Women fill gap

The Greek shipping magnate Aristotle Onassis grew his shipping business in the 1930s and 1940s on the basis of salvaging shipwrecked or mothballed freighters and cargo ships. He first became a client of National City Bank in 1931. The end of World War II was an opportunity for Onassis. In the United States, the Ships Sales Act of 1946 released a large number of vessels onto the market, including many of those known as Liberty ships. Onassis and his brother-in-law and rival, Stavros Niarchos, went shopping. Onassis came to National City Bank and became the first Greek to acquire ships with U.S. bank financing. As the global economy rebounded in the postwar years, there was more oil to be moved than there were tankers to move it. In 1947, the demand for fuel oil skyrocketed, and Onassis was able to charge a premium for transporting it. Onassis' style was to think big. The standard tanker of the day, the T-2, weighed 16,600 deadweight tons. He could see no reason why a tanker could not be nearly twice that size, so he commissioned a 28,500-ton tanker, one of the first "supertankers," which he christened the Olympic Games, and headed to National City Bank for financing. The ship was too expensive, however, to finance with the usual short-term loan. The Depression and World War II were uppermost in the minds of most of the bank's lending officers, and the idea of changing the way they were used to lending was tantamount to heresy. They suggested that he seek financing from insurance companies, who often made long-term loans. For short-term cash, though, Onassis came to the bank. A young man in the shipping department by the name of Walter Wriston was assigned to work with him. Between them, they pioneered a new kind of financing. The ship's charter, not its market value, became the collateral; the money earned by the charter was paid direct to the bank, which deducted interest and principal, and put the rest in the shipowner's account. For the first time, a lender was able to rely on the cash-generating potential of a piece of property. The new method accelerated clearance of the debt; Onassis owned the Olympic Games outright within seven years, rather than the expected 20. It was the work that Wriston did on this deal that first led management to single him out him as having top-management potential. By the mid-1960s, Onassis was able to launch a generation of very large crude-oil carriers, ships so big that his original supertanker, the Olympic Games, could almost have been carried on their decks as a lifeboat. Although this financing concept was revolutionary for its time, it caught on quickly and was soon being used to underwrite other big-ticket items, including railroad cars, skyscrapers, and aircraft.

Innovative thinking within the bank contributes to a revolution in the shipping industry, and is applied to big projects in other sectors

Landmarks in transportation finance

For three years immediately after the end of World War II, National City Bank operations in Europe were confined to two branches in London. It was not until mid-1948 that the bank reopened the Paris branch of the International Banking Corporation, its foreign banking subsidiary. This coincided with the setting-up of the Economic Cooperation Administration by the United States, to run its European Recovery Program for Western Europe. Under this initiative, later known as the Marshall Plan, National City Bank arranged a large number of commercial letters of credit for shipments to countries receiving U.S. government aid. By the time the program came to an end in 1951, the United States had channeled almost $13 billion to Western European countries and Turkey. The main recipients were Britain, France, and the new Federal Republic of Germany, where the bank established a representative office in Frankfurt at the beginning of 1953.

For three years immediately after the end of World War II, National City Bank operations in Europe were confined to two branches in London.

Bank supports Marshall Plan

With much of Europe in ruins, overseas expansion in the years immediately after the end of World War II was limited largely to opening new branches and buildings in existing franchises on other continents, notably Latin America and Asia. A particular focus was Japan, where the U.S. military occupation was creating new opportunities. In 1955, operations were extended to four new countries - Egypt, Liberia, Lebanon, and Saudi Arabia. The bank's first Middle East branch opened in Cairo in April, followed by a second in Beirut in October, and a third in Jeddah in December. In Liberia, it acquired Bank of Monrovia in September of the same year. In 1958, African operations were expanded to South Africa, where the bank had had a brief presence after World War I. The beginnings of a pan-African network came in 1965 with the acquisition of 40 percent of Banque Internationale pour l'Afrique Occidentale. As well as three branches in France, this organization had five branches each in Ivory Coast and Senegal, four each in Cameroon and Niger, three each in Gabon and Nigeria, two each in Congo, Mauritania, and Upper Volta, and one each in the Central African Republic, Dahomey (now Benin), Mali, and Togo. The Gulf presence expanded to include a Dubai branch in 1964. In 1967, a second branch opened in Saudi Arabia, in Riyadh. In 1969, First National City Corporation, the bank holding company formed in 1968, acquired 35 percent of Iranians' Bank, a local bank with four offices in Iran. An office in Tehran followed in 1974, the same year that First National City Bank opened a Jordan branch. In 1975, a new branch was opened in North Yemen.

In the mid-1950s, looking to the future, the bank extends its operations beyond Europe and Asia to new areas of economic promise

Focus on Middle East and Africa

By 1965, Fortune magazine was describing First National City Bank as the "wave of the future" for American banking. It had surpassed its rivals in terms of local branch network; with 150 branches, it was the leading bank in the New York metropolitan area. In terms of assets, it was now America's second-largest bank after Bank of America. It was the top bank overseas, with 163 branches and affiliates in 55 countries and territories. What was more, earnings had kept on growing too. What was the explanation for such a breathtaking growth performance? The magazine noted that the bank had been well placed to expand its domestic retail business with higher-yielding products such as consumer mortgages and personal installment loans. It had pioneered consumer loans as early as 1928 and had been the most aggressive in nourishing the new postwar mass market, helping to develop markets for both car and student loans. First National City Bank was also the only major New York commercial bank with a national charter. Applications to open new branches were processed by the comptroller of the currency at the Federal Treasury Department, who was eager to grant rapid approvals. Banks with state charters had to be approved by the New York State Banking Department and by either the Federal Reserve or the Federal Deposit Insurance Corp. While it had also moved into long-term corporate lending, aircraft leasing, and factoring, First National City Bank's biggest coup was to pioneer the negotiable certificate of deposit (CD) in 1961. Walter Wriston and John Exter, the former Federal Reserve official, noticed that European banks had been issuing such instruments with maturities of three to five years, but they were non-marketable and non-negotiable. Wriston and Exter realized that a marketable time deposit that paid interest would be attractive to corporate investors. And so, by adapting the European idea, the bank found a way to reverse the steady outflow of funds from corporate checking accounts that had begun in the late 1950s. In effect, it was now offering to pay interest to get back funds it was previously getting interest-free. As Fortune noted, "the new instrument took the banking community by storm," with the value of outstanding negotiable CD issues reaching $15 billion by 1965. For First National City Bank, negotiable CDs were now the biggest source of funds after savings deposits.

Riding the "wave of the future," First National City Bank becomes the leading bank in the New York metropolitan area, and top bank overseas

Negotiable certificates of deposit

In 1974, John Reed became head of the new Consumer Services Group. Believing that consumer banking would become a core business, he outlined a long-term vision. "We are creating something new," he wrote in 1976. "I refer to a fundamentally new business starting with a dedication to the consumer, and to the proposition that we can offer a set of services that will substantially satisfy a family's financial needs under terms and conditions that will earn the shareholders an adequate profit while creating a healthy, positive and straightforward relationship with the customer." Written on vacation, this document became known in Citicorp annals as the "Memo from the Beach." "Working in the consumer bank in the early years was like a political campaign internally, particular at the beginning," recalled Pam Flaherty, who, in 1973, as assistant to international banking chief George Vojta, had accompanied Reed on a six-month trip identifying promising consumer markets abroad. "It was a real sense of mission, a sense of ... creating a new kind of business that was really going to benefit the customer." Another strand in Reed's thinking proved very important in later decades: "One of the key thought processes around the consumer bank was called success transfer. The idea was that we would identify ideas and products in one business in one geography and transmit them to another. The most ubiquitous was the automatic teller machine, or ATM." "At the time, there were no customer-friendly ATMs available and only limited capability of developing the fully trustworthy online interactive computer system which was necessary to run them," Reed said. Citicorp tried unsuccessfully to procure supplies. "So we built our own hardware, wrote our own software and introduced the system. Our first was to introduce a complete system for the City of New York." The ATM was launched at a branch in Queens in 1977. By the end of that year, all the bank's New York branches would have at least two machines operating 24 hours a day, seven days a week. "From the beginning, John Reed insisted that there would be two ATMs in every place," Pam Flaherty said. "People thought this was ridiculous as it vastly increased the costs. His view was that machines are not infallible and our promise is 24 hours a day." This commitment was the origin of the slogan "Citi never sleeps," which dates back to that era.

The business is transformed as consumer banking becomes a priority, and the ATM delivers 24-hour service

Focus shifts to retail banking

The Citigold service was inaugurated in Hong Kong in 1982. It made Citi's global wealth-management expertise available to "mass affluent" individuals with $100,000 or more to invest. It was such a success that it was soon adopted, with local adjustments to the minimum investment required, by franchises around the world. By 2011, the service was available in more than 550 Citigold Centers in 36 countries and had just been introduced to Vietnam, where the bank's first retail branch in Ho Chi Minh City had recently opened. For Vietnam, which had a population of about 90 million, the minimum investment was set at $50,000. "The launch of the Citigold platform and the retail bank is a first step in what I think will be a many-step process of Citi entering the consumer space in a very big way," Vietnam country officer Brett Krause said. "The Citigold brand is fortuitous for us in Vietnam because gold is so important to the Vietnamese. It's a place where gold is central to people's wealth preservation. People trade gold, buy gold and store gold so to have a brand like Citigold is powerful in itself."

The Citigold service was inaugurated in Hong Kong in 1982.

Citigold: spreading affluence

Citi's private banking roots date back to the 1820s when a predecessor company of today's Citi Trust (a trust and estate-planning division) started managing the accounts of wealthy British and other European families domiciled in the United States. However, the private bank's modern form, as part of the Institutional Clients Group, can be traced back to an initiative by Walter Wriston, who formed the international services division. This merged all units within Citi that managed the financial-planning needs of wealthy individuals. Wriston's commitment to the business and its clientele was legendary. He was even known to have picked up a client or two flying into the airport at New York. These private-client relationships often brought in institutional business for Citi. In 1982, the division became the International Private Bank; and, in 1986, under John Reed, it was transformed into the Private Banking Group, with a business model that fundamentally continues to this day. It was in 1986 that the phrase "wealth management" was originally coined, and the decision made to be a private bank, as opposed to a brokerage business. The late 1980s and the 1990s saw rapid expansion to onshore centers from traditional offshore locations, such as Geneva and London, leading to the creation of a truly global private bank.

Citi's private banking roots date back to the 1820s when a predecessor company of today's Citi Trust started managing the accounts of wealthy British and other European families domiciled in the United States. 

Sowing the seeds for a modern private bank

One spring evening in 1998, Citibank's chairman, John Reed, sat down to dinner with Sanford I. Weill, the chief executive of Travelers Group. The two men were in Armonk, a small hamlet in Westchester County, New York, where Travelers Group had a conference center. The subject of their conversation was a $140-billion merger. Some weeks earlier, 20 of Weill's top executives had met to consider possible new acquisition targets. Someone proposed Citicorp. "As we talked, I saw that the idea really wowed the group," Weill wrote in his memoirs. "Citicorp stuck out like a strategic home run." After their dinner in Armonk, Reed and Weill met for a Friday morning breakfast with their respective teams. They looked at what each side might bring to the table. Citicorp had its unique global position and strengths in credit cards, foreign exchange, private banking, derivatives, and relationships with multinational companies. Travelers Group had leading franchises in consumer finance, insurance, asset management, investment banking and capital markets, as well as an array of distribution platforms. It was decided to arrange the combined organization in three broad areas - consumer businesses; corporate and investment banking; and private banking and asset management. The group agreed on 50:50 ownership and an 18-member board for the new company, which would take its name from the "Citi" in Citicorp and the "Group" in Travelers Group - to form "Citigroup." Discussions continued through Saturday. Agreement was reached on an arrangement whereby Reed and Weill would each have a veto over big decisions. According to Weill, the final decision to move ahead came on Sunday morning, when he received a call from Reed. Three days later, the Travelers Group board met to discuss the merger, with briefing papers that described the companies as "Jupiter" for Travelers and "Saturn" for Citicorp. News of the merger was released to the world on April 6, 1998. "Undoubtedly, putting together such giants would propel us into a universe of our own," Weill said. Crucial to the rationale underlying the merger was the prospective repeal of the Glass-Steagall Act (Banking Act) of 1933, which had stipulated the separation of commercial and investment banking in the United States. The repeal was signed into law by President Bill Clinton on November 12, 1999.

The leaders of two of the United States' financial services giants see the potential in a strategic merger, and Citigroup is born

Momentous encounter leads to merger

For the United States, the first years of the 21st century were a time of low interest rates and an inflow of investment funds from fast-growing emerging economies and oil-producing countries. One consequence was the widespread availability, and build-up, of low-cost private debt, which fueled over-expansion in the housing market. In late 2007, market conditions began to deteriorate, home prices started on what became a steep decline, and residential-mortgage defaults began to rise. The increasing defaults and subsequent drop in the values of mortgage-backed securities weakened many financial institutions, including Citi. Facing significant losses on its mortgage portfolio, Citigroup commenced raising capital through public and private offerings that raised more than $30 billion over two months in late 2007. However, in 2008, economic conditions deteriorated further, culminating in the collapse of the 158-year-old Lehman Brothers investment bank in September, and prompting further upheavals in the credit and equity markets. Amid widespread uncertainty in the banking sector, in October the U.S. government stepped in with the Troubled Asset Relief Program (TARP). Initially, this provided a combined $125 billion in preferred equity to nine major U.S. financial institutions in order to strengthen their capital positions and boost the broader economy. Citi received $25 billion in TARP capital in October and an additional $20 billion in capital in November 2008. Citi also entered into a loss-sharing program with the U.S. Treasury on $300 billion of loans and securities backed by residential and commercial real estate, consumer loans, and other assets. Citi issued $7 billion in preferred stock to the Treasury and the Federal Deposit Insurance Corporation in exchange for the loss-sharing agreement. In February 2009, Citi announced that it would issue common stock in exchange for certain third-party-owned preferred securities, to increase its tangible common equity without any additional U.S. government investment. As part of this exchange, $25 billion of the U.S. government's preferred shares were converted to common shares as well. In January 2009, Citi announced a reorganization that would allow it to focus on its core banking franchise while reducing non-core assets over time. The following month, chief executive Vikram Pandit appeared before the U.S. House Financial Services Committee with seven other CEOs of companies that had received TARP funds. Following public criticism of large Wall Street remuneration packages, he made his own position clear. He intended to take a mere $1 a year as salary and no bonus until Citi returned to profitability. "I get the new reality and I will make sure Citi gets it as well," he told the committee. At the end of 2009, Citi raised $20.5 billion in public equity, used the proceeds to repay the $20 billion of preferred shares owned by the U.S. Treasury, and terminated its loss-sharing agreement at the same time. By the end of 2010, the U.S. government had sold all of its common shares in Citi. In total, the U.S. Treasury netted a cumulative profit for taxpayers of $12 billion as a result of its investment in Citi. "We will always be grateful to the American people for their crucial support during the crisis," Pandit said. In March 2010, Pandit explained that Citi had become "a fundamentally different company than it was two years ago." Indeed, it had re-emerged as one of the best-capitalized major banks in the United States.

As crisis hits the financial world, the U.S. government backs Citi

Amid economic turmoil, Citi recapitalizes

In 2012, Citi celebrated our 200th anniversary, which provided an opportunity to reflect on two centuries of enabling progress. We thanked our clients at events held around the world, joined together for our Global Community Day to give back to the communities in which we live and work, and, in a global advertising campaign, celebrated our rich heritage of innovation. From popularizing the ATM to helping pioneer digital banking, throughout our bicentenary we shared Citi&rsquo;s history of supporting the people, ideas and solutions that make things better for all of us. As we move into our third century, Citi is proud to continue enabling growth and economic progress for our clients and communities.

In 2012, Citi celebrated our 200th anniversary, which provided an opportunity to reflect on two centuries of enabling progress. 

200 Years Citi

Since it launched in May 2013, the Citi Bike program has become the largest and fastest-growing bike-share program in the U.S. and a familiar sight on city streets. Thousands of blue bicycles at several hundred stations around New York City are available 24/7, 365 days a year through annual, three-day or daily passes. Just two years into the program, Citi Bike riders in New York had taken more than 10 million trips, and that number soared past 60 million through five years. Citi Bikes&mdash;which have helped power the Times Square ball on New Year&rsquo;s Eve&mdash;have expanded to Jersey City, N.J, and Miami, and regularly see more than 60,000 &ndash; 70,000 rides per day.

Citi Bike Launches, Setting Standard for U.S. Bike-Share Programs

Citi Bike

In March 2014, CEO Mike Corbat and the Citi Foundation launched Pathways to Progress, originally a three-year, $50 million U.S. commitment to provide 100,000 low-income urban young people, aged 16 to 24, with the opportunity to develop the workplace skills and leadership experience necessary to compete in a 21st century economy. The initiative focused on 10 of the largest U.S. cities, and Citi worked with leading national partners who have expertise in programs that support young people to transform ambition into achievement.
In 2017, Citi announced a global expansion of Pathways to Progress. Led by a Citi Foundation investment of $100 million to connect 500,000 young people to training and jobs over three years, it marked the largest philanthropic commitment in the Citi Foundation's history.
In addition to the financial investment and technical assistance being provided by the Citi Foundation, more than 10,000 Citi employees volunteer time and expertise as mentors, coaches and role models to young people.

Jump-Starting Career Readiness for Half a Million Young People

Pathways to Progress

Our $100 Billion Environmental Finance Goal is a commitment to finance and facilitate $100 billion over 10 years (2014 &ndash; 2023) toward environmental solutions and activities that reduce the impacts of climate change globally.&nbsp;
The goal is the flagship initiative of Citi's Sustainable Progress Strategy and directly aligns with Citi's mission to provide financial services that enable growth and economic progress. All of the business that counts toward the goal is driven by market demand and generates positive risk-adjusted financial returns for Citi, our clients and for society as a whole.
Midway through the 10-year timeline, Citi&rsquo;s efforts resulted in more than $95 billion in environmental solutions, and in 2018 Euromoney named Citi &ldquo;Best Bank for Corporate Social Responsibility.&rdquo;
Our financing commitment covers a range of environmental and climate change solutions, many of which are new. In October 2016, Citi partnered to help finance the first offshore wind farm in the U.S.&mdash;Deepwater Wind's Block Island Wind Farm. The landmark project allowed Block Island residents to replace inefficient, aging diesel generators with clean, renewable wind power. The project showcased the economic viability of U.S. offshore wind.&nbsp;
In 2017, Citi announced our commitment to be 100 percent powered by renewable energy by 2020. And in 2019, we issued &euro;1 billion three-year fixed rate notes in our firm&rsquo;s first green bond, which funds renewable energy, sustainable transportation, water quality and conservation, energy efficiency and green building projects.&nbsp;

Sustainable progress

In 2018, Citi announced a global, mission-led partnership with the International Paralympic Committee. Through the partnership, Citi aims to raise awareness for the Paralympic Movement, support Paralympic athletes, and advocate for societal change in perceptions around disability.

Sponsoring Strength, Perseverance and Determination Through the International Paralympic Committee

International Paralympic Committee

On March 1, 2021, Jane Fraser became Citi&rsquo;s Chief Executive Officer and the first woman to lead a major U.S. bank. On her first day as CEO, she announced Citi&rsquo;s commitment to achieving net-zero emissions by 2050, including those Citi directly produces and those contributed to by our financing. Fraser&rsquo;s vision for Citi emphasizes modernization, excellence and empathy.&nbsp; In a statement posted on social media, Fraser said &ldquo;Together, we&rsquo;re charting a new course for the world&rsquo;s most global bank &ndash; a bank that is systemically important to the world &ndash; a bank that is iconic &ndash; a bank that champions excellence.&rdquo;

On March 1, 2021, Jane Fraser became Citi’s Chief Executive Officer and the first woman to lead a major U.S. bank.

First female Wall Street CEO

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<h1 class="citigroup-h1" style="max-width: 876px; margin-bottom: 16px;">A Heritage of Enabling Growth and Economic Progress</h1>
With more than 210 years of experience making a positive financial and social impact, we are proud of our past contributions and excited about our future. We invite you to explore Citi&rsquo;s key historical milestones from 1812 through today.

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Citi, the leading global bank, serves more than 200 million customer accounts and does business in more than 160 countries and jurisdictions. Learn more today.

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A Heritage of Enabling Growth and Economic Progress

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