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Citi’s head of Commercial Bank in North America discusses with Global Finance the company’s reorganization of its banking lines.
In mid-September, Citi CEO Jane Fraser announced a comprehensive reorganization of the banking giant. Part of the simplified operating model included bringing the commercial banking, corporate banking and investment banking activities under one Banking business line. Global finance met with Citi’s Raymond Gatcliffe, head of commercial banking, North America, to discuss the changes and their results.
Global finance: Have there been any immediate synergies since CEO Jane Fraser’s reorganization announcement in September, or is everything still a work in progress?
Gatcliffe: Placing investment banking, commercial banking and corporate banking on a level playing field within the banking industry enables greater collaboration. We’ve seen that since the announcements, and we’ve seen a lot of internal initiatives wanting to see how we can increase the level of collaboration synergies and initiatives where we can – with investment banking, sharpen the way we think about serving clients and how we bringing the best of Citi to our customers.
Citi has a top global investment bank, and it’s really about how we can more effectively bring the best of that top global investment bank to our commercial banking clients. One way we’ve done that is by having the commercial bank take a sector coverage approach, which is the same way the investment bank and the investment bank cover clients. So, through three banking organizations approaching customers from an industry or sector lens, we see more collaboration, sharing content and advice, and ultimately winning.
Gatcliffe: The initiative to change the sector coverage was initiated in 2022, but I think some of the initiatives that came after September, especially in the investment bank, have sharpened the focus and aligned resources between the commercial bank and the investment bank brought.
G.F: Was this coverage change a post-September or pre-September change for commercial banking?
For example, at our headquarters at 388 Greenwich St. in New York, we have brought commercial, corporate and investment bankers together on the same industry floors. That speaks to that level of partnership, collaboration, synchronicity and focus. We see this as one of the greatest opportunities to grow the commercial bank together with our banking colleagues.
G.F: Where does commercial banking stop and corporate banking begin with the new synergies?
Gatcliffe: We separate commercial and business banking by classifying customers with sales or revenues of less than $3 billion served primarily by the Commercial Bank and customers with more than $3 billion served by the Corporate Bank. We look very carefully at how we cover them. However, many customers have sales of more than $3 billion per year. But if you want an overall differentiation, it’s about $3 billion in sales or revenues.
G.F: And with $3 billion in revenue, that goes beyond SME status, right?
Gatcliffe: Yes. But Commercial Banking starts at $10 million in revenue or revenue, all the way up to $3 billion and sometimes more. Overall, we are much more focused on where Citi Commercial Bank can deliver the most value through our global network spanning more than 95 countries, our deep expertise and our wide variety of products and solutions across our businesses. We strive to offer the mid-market the same level of service and products as large caps through their banks.
Companies that are more medium-sized and have cross-border needs can get the most out of banking with us. However, we serve customers across the sales or revenue spectrum with varying strategic objectives. Citi also includes clients with $10 million in revenue, which we call emerging growth companies, innovators or startup disruptors. Often these companies are born with the potential to scale globally, so they benefit from our international presence and product range. So we also cover the startup community within the commercial bank.
G.F: Have any additional features been rolled out to the CitiDirect Commercial Banking platform?
Gatcliffe: We rolled out several features, so basic visibility, payments, information, records and overviews were the first features.
Now we’re moving into the foreign exchange market, moving into lending and accessing lending, and introducing several new features.
We are constantly adding new functionality and also giving customers the ability to do some of the things they would do in our service centers; they can get that information, they can get that access, they can get that question answered through the information that they would have about CitiDirect Commercial Banking. The platform will continue to evolve as it has been created with input from users or customers and we will continue to solicit feedback on usability and where improvements are needed.
