Terri Dial's resignation as head of North American consumer banking at Citigroup Inc. answered long-simmering questions about how much longer she would last at the beleaguered company.
But it did little to clear up other key questions hanging over the company, such as what it plans to do with its branch network, and whether it will ever close out the game of musical chairs that seems to redraw the firm's organizational chart every few months.
Manuel Medina-Mora, the Citi Latin America executive who added Dial's responsibilities to his list of duties, declined a request for an interview. The public affairs office was no more forthcoming about Citi's branch strategy than it was during the nearly two years that retail banking was overseen by Dial, who stayed out of the media spotlight and kept whatever ideas she had for the business close to the vest.
There were signs that Citi hopes to channel the strength of its international presence into the North American consumer business, though its plans for doing so remain vague. Citigroup Chief Executive Vikram Pandit praised Medina-Mora for implementing in Latin America what he referred to as Citi's "new model — a global bank for businesses and consumers," although how that would be different from the company's old model was unclear. Citi also announced the establishment of a "Consumer Council" that Medina-Mora will chair. In that role, Medina-Mora, who so far appears to be the council's only member, will work closely with all of Citi's regional CEOs and oversee the firm's global consumer strategy, according to a press release.
But it is in the United States where Medina-Mora will have the most work to do. He will have to integrate the company's consumer offerings and figure out how to maximize a branch network that has a strong foothold in a handful of attractive metropolitan markets, but looks like an also-ran next to the far-reaching operations that have allowed Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co. to practically blanket the country with locations.
"Citigroup is making yet another attempt to build its retail banking business. Hopefully this one will be successful," Rochdale Research analyst Dick Bove wrote in a note to clients.
Bove surmised that Citi wants to stay focused on a limited number of markets and raise its prestige to appeal to a more upscale clientele. That concept was part of the retail banking plan that Dial was sharing internally as recently as late last week, according to a source familiar with the strategy.
It is unclear whether Medina-Mora will stay that course, but he seems to have few alternatives. Expanding the branch network is out of the question given Citi's financial woes. And while several rounds of press reports last year speculated on a possible retreat in some markets, Pandit played down that idea, and the company's branch count hovered just above 1,000 throughout 2009.
"We are in the right places, and while we continuously refine our branch locations, we are not anticipating any dramatic changes to our footprint - despite recent media reports to the contrary," Pandit and Dial wrote in a September memo to employees.
Press reports indicated that Dial's departure was hastened by an illness in her family, but her tenure was fraught with speculation about her ability to have an impact. Bove said that the former Wells Fargo executive, who worked for Lloyds TSB Group PLC before joining Citi in March 2008, likely was constrained by Citi's history of weak investments in technology and retail banking. Her lack of visibility in the media and on Wall Street drove a steady drumbeat of doubts about her role, which seemed to be further complicated by last summer's hiring of Eugene McQuade as CEO of Citibank N.A., the firm's core banking entity.
McQuade, a former FleetBoston Financial executive, was hired to placate regulators concerned about the bench of commercial banking talent at Citi. The company had said his arrival would have no impact on Dial. Six months later, it is still unclear how his role intersects with that of the post now held by Medina-Mora. And now Citi needs to figure out where to place Douglas Peterson, its point-man in Japan, who reportedly is returning to New York now that the firm has sold many of its big Japanese assets.
Medina-Mora has been head of Citi Latin America since 2005, and has spent 35 years between Citi and the Mexican operation it acquired, Grupo Financiero Banamex. Educated in Mexico and at Stanford University, he coordinated the privatization of Banco Nacional de Mexico in 1990 and was president of the Mexican Banking Association from April 2003 to March 2005. He sits on Citi's executive and senior leadership committees.
Like Dial, who retains unspecified duties as a "senior advisor," he will continue to report to Pandit. The North American consumer banking franchise includes 12 million retail banking accounts, 25 million credit cards and $139 billion of deposits. It accounted for more than 8.5% of firm-wide revenue in the third quarter.
