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Provide a 10 pages analysis while answering the following question: Citigroup as an Investment bank. Prepare this assignment according to the guidelines found in the APA Style Guide. An abstract is re
Provide a 10 pages analysis while answering the following question: Citigroup as an Investment bank. Prepare this assignment according to the guidelines found in the APA Style Guide. An abstract is required. The purpose of this paper is to analyze Citigroup’s investment banking segment. Investment banks aid in the underwriting of security deals in the process of raising capital for their corporate clients. In addition, investment bankers provide a myriad of other financial services to make sure the deals meet the entire financial and legal requirements by handling transactional aspects of the deals. Citigroup is a reputable global financial institution with a very highly diverse financial services portfolio providing the services in investment banking in many countries in the world. While Citigroup has both commercial and retail banking sections, the bank also prides itself in having one of the best investment banks in the world, with many of its deals running into billions of dollars each. While retail and commercial banking includes the taking of deposits by the bank, the investment banking sector precludes the taking of deposits, and instead engages in facilitation of transactions and promotion of securities. Citi’s investment bank is among the top ten in world, making over $3.2 billion in fees for the year 2010. The group’s investment baking section leads in many regional financial services markets, and has won numerous awards for its investment banking operations. Citigroup was formed in 1998, after the merger of Citicorp and Travelers in a $70 billion merger. City Bank’s origin dates back to 1812, which gives the financial institution a 200-year legacy in the banking industry as of this year. Citigroup has since become a world-renowned financial institution with diverse banking specialties. The bank boasts of a vibrant presence in over 100 countries and a workforce of over a quarter of a million employees. The investment banking section of the financial services group accounts for billions of dollars’ worth of transactions, and thrives against a backdrop of brutal investment banking competitors with a global presence in the industry. Initially, the law disallowed the merger of commercial and investment services by a single financial services entity before the year 1998. However, with the timely passing of the Gramm-Leach-Bliley Act at the turn of the twenty first century is what many financial analysts regard as the single most important contributor to the success of many financial institutions such as Citi’s investment banking segments. Primarily, investment banks turn profits by charging fees and commissions for their services (Jobs Digest, 2010). Citigroup offers many investment banking services, which involve underwriting services, issuance of capital in primary and secondary markets, and making debt arrangements on behalf of their clients. The clients include governments, corporations and wealthy individuals and families. The amount of money investment banks make has risen considerably over the last few years. However, many investment banks reported numerous losses that crippled their operations and forced many into merger and acquisition deals and government bailouts during the 2008 global economic crisis. Citigroup reinforced its loyalty with its customers for sustaining the economic blow without a bail out from the government. The crisis in the investment banking sector was mainly attributable to the deals in sub-prime lending deals (Jobs Digest, 2010), which fell into default and made the banks suffer historical and crippling losses. Citigroup lost 35% stake to the state in the heat of the economic meltdown (Jobs Digest, 2010). Citigroup has four major regions: North America, EMEA (Europe Middle East and Africa), Latin America, and Asia. Each of these regions made $544, $1,224, $ 653, $1,253 billion worth of transactions respectively for the year ending 2010, totaling to $3,674 billion.
