Citigroup wants 50 percent of profits from overseas

Citigroup Inc wants its burgeoning international unit to make up half of the world's largest financial company's profits over the next several years, bank officials said late Friday.
Citigroup's international bank, which has 76 million customer accounts from London to Tokyo, is already growing profits faster compared with the North American part of the bank - led by the overseas consumer bank. It now makes up 38 percent of the whole company's earnings.
"Our aspirational goal over the next several years is a balance where international will represent about 50 percent of our earnings," said Citigroup's President and Chief Operating Officer Robert Willumstad in a call with analysts and investors.
Sir Deryck Maughan, Citigroup international chairman and chief executive officer, said that in his personal opinion the organic growth rate has been about 10 percent for the international unit, after stripping out restructuring costs and other items.
"We can raise that growth rate," he added.
Expansion will come from both acquisitions around the world and from organic growth from existing operations.
Speaking of potential purchases in mature markets like Germany, Japan or the United Kingdom, Maughan said, "if we want to get to scale, not in all of those markets, but in some, in retail banking - that will require an acquisition."
International earnings grew 19 percent last year, and were up 30 percent in the first half of this year.
So far Asia, outside of Japan, has led the way with a 50 percent increase in net income in the first half of 2004.
At the same time the bank has become more cautious at times in geopolitical hotspots like the Middle East and the Korean Peninsula.
Maughan said that just before the war in Iraq, the bank reduced its risk in the region. "War is, generally speaking, not good for business."
He added that the bank was asked to set up in Baghdad, but said they declined.
The bank reduced its risk profile around Korea as well when the situation surrounding North Korea and nuclear weapons heated up earlier this year, the bank chief said.