"Is Citibank Risky?" Survey

[SIA1A]

I received a call from Citi (actually, a survey company that claimed it was calling on behalf of Citi) a few days ago.

After asking for me by name, I was asked "are you comfortable about dealing with Citibank, given the risks in the global banking market." (The words may have been a little different.)

I replied "No" (ie I am uncomfortable), following which the caller thanked me and then hung up.

Has anyone else received similar calls? I run a large credit card balance with Citi but I have a bank balance with Citi that covers my credit card outstandings about 20 times. I have also received several unsolicited snail-mail letters from Citi that attempt to reassure me about Citi's credit worthiness.

Reason I am uncomfortable: It looks like Citi will only survive if it gets another very large US Govt bailout stash. Share price has dropped from high $50s a little over a year ago to less than $4 today.

I'm also very uncomfortabe about govt guarantees - the government may guarantee the bank's deposit funds but I do not believe that it guarantees timely repayment of those funds if the bank goes belly-up. ie it could take months or years to recover money under the govt guarantee.

[skybolt_]

I'm a Citi Credit Card & deposit customer also.

Its the deposit situation I'm also getting a little nervous about.

It maybe time to say 'hello again' to either CBA/NAB/WBC or ANZ.

[ric_melb]

I am in a similar position with Citibank deposits and Citibank credit cards.
When the Financial Crisis got more severe I reviewed my position regarding Citibank.

I think the first reality is that Citibank is too big to be allowed to fail. We have already seen the US government support it, and given the fact it operates in 100+ countries any failure would cause great difficulties in many countries. Trying to clean up the mess would be horrific, and I imagine many governments have advised the US government accordingly.
Apart from that I think the US government knows it.

Now we have the Australia Government guaranteeing deposits up to AUD1 million for the Citibank Australia vehicle. This is current till October 2011.
I have not been able to google up detail on interest payments, but it would seem to me the Government intent would be to cover both principal and interest payments.

My own conclusion was to continue with Citibank, but I think if others have worries, then they should consider moving their deposits to one of the Australian Big 4. Not only are the 4 in a relatively sound position, plus have the Government Guarantee, but in our context they are too big to be alowed to fail.

[comint]

I think the first reality is that Citibank is too big to be allowed to fail.

I have to disagree, many of these companies are too big NOT to fail. Then like the bloated carcass of a dead whale washed up on shore, the best bits can be picked off by other more efficient businesses, strengthening the market as a whole.

[vilemerchant]

Citibank have always been a great place to get and park DEBT, but there's no way on earth I'd keep even a dollar on deposit there. They can't be bailed out forever, the Americans are printing so much money bailing out all and sundry with money they don't even have that the US$ will eventually fall on its arse. Citibank are pretty screwed in the longterm and pretty much HAVE to fail.

What on earth is the point of keeping your own money in a Citibank account?

[trippin_the_rift]

Citibank have always been a great place to get and park DEBT, but there's no way on earth I'd keep even a dollar on deposit there. They can't be bailed out forever, the Americans are printing so much money bailing out all and sundry with money they don't even have that the US$ will eventually fall on its arse. Citibank are pretty screwed in the longterm and pretty much HAVE to fail.

What on earth is the point of keeping your own money in a Citibank account?

I have to disagree with this...

Citibank sure is a great place to park debt and as such they have created a lot of money for the world. Governments NEED banks and that's why they're getting what seems to be unlimited green lights to create more money into existance.

Long term, citibank is fine as long as it's client's can service the debts. The rest is all hype.

[kdser]

Hi Guys, don't worry. Citi Australia is going to be bought by one of the Australian banks. I am more concerned about the competition after the likes of GE Money, BankWest, Wizard are gone.

[SIA1A]

Hi Guys, don't worry. Citi Australia is going to be bought by one of the Australian banks.

Really? Who? Whichbank maybe?

[SIA1A]

I am more concerned about the competition after the likes of GE Money, BankWest, Wizard are gone.

There's still some strong competition around, eg HSBC. ING seems to be doing OK too after its Dutch govt intervention.

[kdser]

Really? Who? Whichbank maybe?

I have read somewhere that Citibank is trying to sell its Australian operation. One or two of the big 4 are interested.

However, it doesn't really matter who is the potential buyer. NAB had always been the potential buyer of Wizard before Oz Home Loan grab Wizard.