Citigroup (C) Transforming Credit Card, Retail Banking Units

Citigroup Inc. (NYSE:C) is reorganizing its credit card and retail banking operations in the U.S. to improve service and boost sales, and made management changes within those units, according to Citi memos Wednesday.

Top executives at Citi, the third largest bank in the U.S. by assets, have long felt the bank was too technocratic--focused on products rather than service and selling. Manuel Medina-Mora, consumer chief for the Americas, pledged to change this focus, and in September hired Cecilia Stewart and Jud Linville as heads of retail and cards, respectively, to help design and implement a new strategy.

Wednesday, the two introduced to their staff organizational and management changes the bank hopes will help in targeting the right customers with the right product. In a move to focus more on customers, retail banking and cards will be organized into units focused on customer segments, product development, and distribution.

In a memorandum to Citi's retail banking staff, Stewart said, "We must align ourselves to the segments, strengthen our product and service offerings...enhance the customer experience...and maintain oversight and control of our underlying risks. Achieving this will improve our market position and generate sustained, long-term growth and profitability."





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American Express (AXP), Bank of America (BAC), Capital One Financial (COF), JPMorgan (JPM) and Credit Card Risks

Consumers still have difficulty understanding the costs and risks of credit cards, despite some improvements made by issuers, a top regulator said Tuesday

“Our next challenge will be about further clarifying price and risk and making it easier for consumers to make direct product comparisons,” said Elizabeth Warren, Special Advisor to the Secretary of the Treasury for the Consumer Financial Protection Bureau, at the beginning of a credit card conference bringing together regulators, bankers, academics and market research groups.

The conference takes place roughly one year after many provisions of a new credit card law, the Credit Card Accountability Responsibility and Disclosure Act took effect.The consumer bureau will take responsibility for administering the statute later this summer.

In addition to raising concerns, Warren praised credit card companies for going above and beyond requirements of the statute. She cited data assembled by the consumer bureau and bank regulators that said card issuers have done better than the law requires of them when it comes to curbing opaque interest rate re-pricing and cutting over-limit fees. Read about the findings of credit card studies.

“A number of [credit card] issuers have eliminated some of the practices that can confuse customers and cost them money they reasonably did not expect to pay,” she said.

Research firm Nilson Report lists the top nine credit card issuers as American Express (NYSE:AXP), Bank of America Corp. (NYSE:BAC), Capital One Financial Corp. (NYSE:COF), J.P. Morgan Chase & Co. (NYSE:JPM), Citigroup Inc. (NYSE:C), Discover Financial Services (NYSE:DFS), HSBC (NYSE:HBC), U.S. Bancorp. (NYSE:USB) and Wells Fargo & Co. (NYSE:WFC).

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