Citigroup in Latin America Focus on Brazil

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Citigroup in Latin AmericaFocus on Brazil

• Adib Khelef
• Phillipe De La Clergerie
• Nora Lovstad
• Hanne Ebbesen

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Plan

• Citigroup
• Citigroup in Latin America
• Citigroup in Brazil
• Citigroup and agribusiness in Brazil

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Citigroup brands
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Citigroup

• Largest financial institution in the world
• Citigroups goal is to be the most respected
  global financial services company
• Global Consumer, Corporate and Investment
  Banking, and Global Wealth Management
• First financial services company in the U.S. to
  bring together banking, insurance, and
  investments
• 300,000 employees manage 200 million customer
  accounts across six continents in more than 100
  countries
• North America Mexico Europe, Middle East and
  Africa Japan Asia Latin America

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Citigroup - History

• Founded in 1812 as City Bank of New York
• 1894 it becomes the largest bank in the U.S., and
  3 years later the first major U.S. bank to
  establish foreign department
• 1929 it is the largest commercial bank in the
  world, where expansion is accelerated with merger
• In 1976 it takes the name Citibank N.A.
• 1977 launches Citicard Banking Centers
• 1993 Citibank is the largest credit card issuer
  and servicer in the world
• October 1998 All Citicorp and Travelers Group
  (with Salomon inc.) divisions merge to become
  Citigroup Inc.
• 1999 launches CitiDirect Online Banking
• Citigroups 13 billion of earnings in 2000 make
  it one of the worlds most profitable companies
  in the world.

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Citigroup in Latin America

• Entered Latin America in 1914 in Argentina and
  Brazil.
• Optimistic view and long-term vision in 23
  countries
• Satisfied customers people, products and
  services
• Harnessing the financial power of the U.S.
  enormous Latin American community (Mexico and
  Brazil).
• New trends in corporate organization, technology
  utilization and patterns of financing
• Large infrastructure projects with large
  proportion of risk and funding Citibank 1st in
  providing derivatives and risk management tools
  to companies in Latin America
• e-solutions and commercial cards

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Crisis

• 1980s debt crisis
• Huge debt exposure but remained committed
• Forged closer ties to the government
• Rewrote the retail banking rules
• Expanding its regional branch network, launched
  new products and services, and introducing new
  technologyall at a time when its competitors
  were exiting the region.
• 2002 (Argentina)
• Largest lender 7.7 billion
• 20 billion in deposits
• Beneficial capital flight to the U.S.

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Recent news in Latin America

• Expanded its distribution channel by 30
• Advisor in the largest acquisition in Latin
  American history Cemex RMC (U.K.)
• Financial Education Program with Habitat for
  Humanity
• Several banking rewards e.g. Best bank in Latin
  America

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The Global picture

• Latin American operations have almost doubled in
  net results, representing 8 of Citigroups total
  net income

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Citibank Brazil

• Citigroup plans to become a big retail bank in
  Brazil.
• Expand consumer lending outlets fivefold by 2008.
• Currently, Citibank is the 12th biggest bank in
  Brazil.
• Assets of 22.5billion Reais, equivalent to 8.6
  billion

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Citibank Brazil

• Citibank wants to tap faster expansion in South
  Americas largest economy.
• Brazil experiencing boosting demand for banking
  services (loans).
• Repeat strategy in Mexico acquired Banamex
  Accival , Mexicos second largest bank for 12.5
  billion.

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Citibank Brazil

• Currently Citibank has 45 full service branches
  in Brazil.
• Wants to open 30 new outlets.
• Add 40 consumer finance shops, targeting low
  income clients.

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Citibank Brazil

• Citibank is making Brazil a top priority country
  for its expansion.
• Any sign showing that Brazil could become a
  wealthier country makes consumer banking very
  interesting.
• Citibank held their strategy for Brazil for a
  while due to the Argentina crisis.

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Agribusiness Evolution in Brazil

• From the 50s until the 80s, Brazil had followed
  the path of the US evolution on agriculture
  thanks to new technologies.
• Since the 90s, the deregulation of markets,
  trade liberalization, and economic stability had
  reduced agriculture tariffs under 30.
• In 2000, Agribusiness represented 28 of GDP

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Agribusiness Evolution in Brazil
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Citibank and the agribusiness in Brazil An
example Soybeans

• Help the financing of the improvement of
  transportation facilities
• Construction of the Trans-Amazon Highway
• Construction of the Madeira-Amazon Waterway
• Construction of the Tiete-Parana Waterway
• It is also the major financer of soybean crushers
  companies such as ADM, Cargill and Bunge

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Citibank and the agribusiness in Brazil An
example Soybeans

• Use of soybeans futures contracts as hedging
• Prices and volume of trade had constantly
  increased for the past few years
• Chicago Board Of Trade (CBOT) is interested in
  creating specific soybeans future contract with
  physical delivery in Brazil

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Citibank and the agribusiness in Brazil An
example Soybeans
CBOT prices soybeans/oil, 2003-04
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Sources

• www.citigroup.com
• Citibank annual report 2004
• the banker.com
• Institute For International Trade Negotiation
• Robert Sicina Prior CFO of the Latin American
  Division of the Consumer Group of Citibank
• Bill Rhodes, Michael Payte
• Bloomberg

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Thanks for your attention!!

• Questions?