The markets were uplifted by the news that Citi expects to have its best quarter since 2007 this quarter and be profitable for the year. However, Bart Narter, SVP of the banking group with Celent, a Boston-based research firm, has a more muted response.
"I thought 'ok, maybe, maybe not'," Narter told BS&T, explaining, "They said 'We're profitable except for our market markdowns'. I hate it when companies say, ' We're profitable except for the following exceptional events. Exceptional events happen every quarter."
Late last year, Citi got $45 billion from the government through TARP plus $306 billion in loan guarantees.
Narter told BS&T at the time that "There are different animals within Citi, so you can't say, 'what's Citi doing?'" A very strong constituent, he says, is Global Transaction Services, New York, which provides cash management and trade services to big businesses. "Citi's GTS is growing at 38 percent, so they may want to keep their technology leading edge, but Citi mortgages, Citi cards?" he asks rhetorically.
As for the technology implications of the crisis on Citi, Narter says, "Overall Citi's tech spending is going to go down in the U.S.," adding, "banks generally will shift from new investments to containing costs and will increase outsourcing."
Citi was known for being somewhat indiscriminate in trying new technology. CIO Since mid-2008 it has made some top-level IT executive appointments —in Marty Lippert and BS&T Elite 8 honoree Anita Sands, as MD of transformation.