The rehabilitation of Citi from crisis casualty to born-again global player is well under way. The bank has profitable quarters behind it and plans to return capital to shareholders in 2012. Half of its non-core assets have been sold and among its retained assets two franchises stand out as engines of future growth – the global transactions services business and the bank’s extensive presence in emerging markets.
The challenge, however, is what to do with the US consumer business, which was flagging even before the crisis. It contains the majority of the bank’s bad loans, there are questions about scale compared with rivals, and growth rates are sluggish. By contrast the emerging markets franchise – especially in key countries such as Mexico, Poland and South Korea – benefits from strong growth, low penetration and low levels of bad assets.
