Citigroup: From Riches to Rags in Hungary


 “Citi’s global consumer banking business took the hardest hit on Wednesday, with the bank saying it will eliminate 6,200 positions and close 84 branches worldwide, including in Brazil, Hungary and South Korea, with 44 closings in the United States.”

—The  New York Times, December 6, 2012

Chain Bridge — Budapest

The Hungary closings evoked some vivid memories of Budapest, and recognition of Citi’s decline.

I happened to be in Budapest in 1995 when, with stunning opulence, Citi opened its consumer bank office. It had been only six years since the historic  Communist downfall in Hungary.

Although I was a Citi employee, I had no official role in the consumer bank grand opening.  I was in town for the Association of Corporate Travel Executives (ACTE) International Conference. I was the VP of Corporate Affairs for Diners Club International, a Travel and Entertainment charge card which Citi had acquired, and was representing the Diners Club brand at the Conference which attracted buyers and sellers of international business travel products and services.

My wife, Sharon, and I were heading to a Conference event when we grabbed an elevator in the host hotel. Inside the elevator was Victor Menezes, the CFO for Citi. Although I had met him once in a reception line in New York, he didn’t recognize me. I re-introduced myself and introduced Sharon to him.

“I report to Bob Rosseau (then the Chairman of Diners Club International) and write the monthly Diners Club International business letter to you,” I told Menezes.

He nodded…and smiled.  “Diners Club is our only business that includes drawings in its monthly letter.”

He was referring to the cartoons we cut and pasted on the first page of the report to illustrate an operating condition, a frustration, an opportunity, or just a gag about something relevant from the month’s activity.

He asked me if I was in Budapest for the consumer bank office opening. I told him no and briefed him on the ACTE conference.

By the time we reached the lobby, Menezes had invited Sharon and me to the consumer bank grand opening ceremonies that were scheduled for the next evening. “I hope you two will come. It will be a festive occasion,” he said.

We showed the next day up at Vorosmarty Square, home of some of the priciest real estate in town.  A huge Citi-branded party tent dominated the center of the stylish square, fronting the sparkling new Citi consumer branch. Once past security, guests were handed a cocktail made of blue Curacao. It matched, with Pantone® accuracy, the exact PMS hue of Citibank blue.

The President of Hungary Was There

Árpád Göncz, the president of Hungary. and other dignitaries were introduced. Menezes made welcoming remarks, pausing after every phrase for the Hungarian translation.

Then Menezes invited President Göncz to have the honor of being the first Hungarian to use the Citi-ATM on the exterior of the new branch.

Göncz looked excited as he, Menezes, a branch manager, the translator and a bunch of media moved to the ATM. The manager helped Göncz insert the card, key the PIN and amount. An exuberant Göncz then turned happily to the throng, waving a fistful of Hungarian Forints over his head, and said something in Hungarian. The translator had the microphone. “I milked the wall! I milked the wall!” was the inelegant English translation.

So Was Sir Georg Solti

We had a customer dinner that night and had to miss a VIP concert. Citi had brought in Budapest-born Sir Georg Solti, once the famed conductor and musical director of the Chicago Symphony and others, to be the guest conductor of the Budapest Philharmonic Orchestra for a special performance. I regret not going, because Solti died just two years later.

Walking back to the hotel after the ceremonies, we struck up a conversation with another American who had been at the grand opening. It turned out he was one of the pilots who had flown Menezes and some staff over in a Citi private jet.

“Doing anything special tonight?” I asked.

“Nope,” he replied. “We’re heading back to New York early tomorrow and I need the rest.”

 

 

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  • I still remember the president’s translated remarks: “I milked the wall! I milked the wall!”

  • Tess

    What do you think went wrong after that extravagant opening ceremony ? What does the future hold for Citi?

    • What happened after the opening? Shifting markets, re-allocation of corporate resources, the ease of shutting down labor-intensive low volume retail banking operations.

      The future? Citi, like other global money center banks, create markets. They look to maximize return on investment. No organization’s future is guaranteed, but a newly re-organized, leaner, hopefully smarter Citi will survive.

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