Business Case Studies, Growth Strategies Case Study, Citigroup's Expansion Strategies in Russia

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Case Title:

Citigroup's Expansion Strategies in Russia

Publication Year : 2007

Authors: Joy Chakraborthy, Snehasish Chaudhuri

Industry: Banking, Insurance and Financial Services

Region:Global

Case Code: GRS0184K

Teaching Note: Available

Structured Assignment: Available

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Abstract:
Citigroup had been operating in Russia since 1993 and primarily catered for the country's industry giants, subsidiaries of major multinational corporations, leading banks and fast-growing domestic companies. In 2002, Citigroup's Russian subsidiary forayed into the retail banking arena in Russia in its bid to tap the ever-increasing Russian retail market and since then developed themselves at a fast pace due to overwhelming customer demand for the bank's products and services. Russia was one of the promising markets and the biggest growth area in Eastern Europe. In anticipation of enhancing their businesses across Europe, it was obvious that Raiffeisen would aim to strengthen its foothold in Russia. In a bid to retain its dominance in the consumer, corporate and wealth management sectors; the global bank had established around 40 branches in Russia at the end of 2006 with 190 new branches scheduled to be opened in 2007. Analysts were also surprised at the Citigroup's strategy of not adopting the path of inorganic route of expansion in Russia to grab a major piece of the country's banking market. Critics opined that the rising branch expansion strategy in Russia instead of inorganic growth might not turn out to be a fruitful business proposition for the US bank in the long run.

Pedagogical Objectives:

  • To understand the growth strategies of Citigroup
  • To analyse the benefits and drawbacks of expansion strategies associated with banking companies
  • To study the impact of Citigroup on the Russian banking sector
  • To understand the trends and developments in the Russian banking sector
  • Tounderstand the pros and cons of the Russian banking sector reforms.

Keywords : Citigroup; Russia; CAGR (combined annual growth rate); Strategy; Assets; Credit; Deposits; Growth Strategies Case Study; CEE (Central and Eastern Europe); Corporate; ROE (return on equity); CAR (capital adequacy ratio); CBR (Central Bank of Russia); Domestic; Retail; Global

Contents : 
Company Profile - Citigroup Inc
Citigroup's Business Strategy in Russia
1998 through a merger 5 of Citicorp and Travelers Group
Citibank named Best Consumer Bank in Russia by Global Finance
Citicorp was operating in nearly 100 countries
Distribution of Total Income of Citigroup

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