INTRODUCTION CITIBANK: Citibank is the consumer banking arm of financial services giant Citigroup.

Citibank was founded in 1812 as the City Bank of New York, later First National City Bank of New York. As of June 2009, Citigroup is the fourth largest bank holding company in the United States by domestic deposits, after Bank of America, Wells Fargo, and JP Morgan Chase. Citibank has retail banking operations in more than 100 countries and territories around the world. More than half of its 1,400 offices are in the United States, mostly in New York City, Chicago, Los Angeles, San Francisco/Silicon Valley, and Miami. More recently, Citibank has expanded its operations in the Boston, Philadelphia, Houston, Dallas, and Washington D.C. metropolitan areas, albeit with a mixed record of success. It was reported that Citigroup executives were pleased with the performance of the Boston branches, but were less impressed with the Philadelphia experiment, according to a person familiar with the situation. On September 24, 2009, The Wall Street Journal reported that Citi planned to narrow the focus of Citigroup's U.S. branch network to just six major metropolitan areas, including New York, Washington, Miami, Chicago, San Francisco and Los Angeles, where Citi has a substantial presence but ranks no higher than No. 3 in deposits. The article also noted that Citi could abandon or scale back where it is an also-ran, including Boston, Philadelphia and parts of Texas, according to people with knowledge of the discussions. In addition to the standard banking transactions, Citibank offers insurance, credit card and investment products. Their online services division is among the most successful in the field, claiming about 15 million users. As a result of the Global financial crisis of 20082009 and huge losses in the value of its subprime mortgage assets, Citibank was rescued by the U.S. government under plans agreed for Citigroup. On November 23, 2008, in addition to initial aid of $25 billion, a further $25 billion was invested in the corporation together with guarantees for risky assets amounting to $306 billion.

CITIBANK IN PAKISTAN: Citibank (Citi) has been operating in Pakistan since 1961 and has a highly respected franchise through its successful delivery of innovative, high-quality banking products and services to its clients. Businesses With over 1100 employees in Pakistan, Citi operates through two major business lines; Global Consumer Group and Institutional Investors Group, providing a variety of services to more than 200,000 consumer and corporate clients respectively. Citi has steadily expanded its network over the last two years and now has 26 branches and 39 customer contact points across 10 cities in Pakistan. Community Citis philanthropic arm- the Citi Foundation is committed to enhancing economic opportunities for underserved individuals and families in Pakistan. Since 2002, the Citi Foundation has given more than US$3.23 million in grants to projects focusing on poverty alleviation through microfinance, education & financial literacy and volunteerism. Citi Pakistan has received the prestigious CSR National Excellence award for outstanding Corporate Social Responsibility in 2007. Achievements Citis contribution to the local financial sector is centered on its commitment to its customers be it through best in class products and services, transfer of expertise and technology, innovation and its investment in its people. Citi has many firsts' to its credit including launching the first credit card in Pakistan, pioneering Consumer Asset financing and introducing the first 24 hour, 7 days a week call centre, launching bancassurance- milestones that have set a standard for others in the banking industry. Citi has also been at the forefront of the financial sector reform process and has been the lead bank in taking the Government to international capital markets, including issues of the first Foreign Currency Sukuk, the first 30 year US Dollar Sovereign Bond and the first equity offering in over a decade. It is also the leading bank in Pakistan for delivering Export Agency and Multilateral financing and has been instrumental in the development of Pakistan's market for derivatives and other treasury products.

FINANCIAL & INVESTMENT ENVIRONMENT OF CITI BANK GLOBALLY:

Following Citibank merger with the First National Bank, the bank changed its name to The First National City Bank of New York in 1955, and then shortened it to First National City Bank in 1962. The company organically entered the leasing and credit card sectors, and its introduction of USD certificates of deposit in London marked the first new negotiable instrument in market since 1888. Later to become part of MasterCard, the bank introduced its First National City Charge Service credit card - popularly known as the "Everything Card" - in 1967. During the mid-1970s, under the leadership of CEO Walter B. Wriston, First National City Bank (and its holding company First National City Corporation) was renamed Citibank, N.A. (and Citicorp, respectively). By that time, the bank had created its own "one-bank holding company" and had become a wholly owned subsidiary of that company, Citicorp (all shareholders of the bank had become shareholders of the new corporation, which became the bank's sole owner). The name change also helped to avoid confusion in Ohio with Cleveland-based National City Bank, though the two would never have any significant overlapping areas except for Citi credit cards being issued in the latter National City territory. (In addition, at the time of the name change to Citicorp, National City of Ohio was mostly a Cleveland-area bank and had not gone on its acquisition spree that it would later go on in the 1990s and 2000s.) Citibank in California had only a handful of branches before acquiring the assets of California Federal Bank in 2002 with Citicorp's purchase of Golden State Bancorp which had earlier merged with First Nationwide Mortgage Corp. In 2001, Citibank settled a $45 million class action lawsuit for improperly assessing late fees. Following this Citibank lobbied the United States Congress to pass legislation that would limit class action lawsuits to $5 million unless they were initiated on a federal level. Some consumer advocate websites report that Citibank is still improperly assessing late fees. In August 2004, Citibank entered the Texas market with the purchase of First American Bank of Bryan, Texas. The deal established Citi's retail banking presence in Texas, giving Citibank over 100 branches, $3.5 billion in assets and approximately 120,000 new customers in the state. First American Bank was renamed Citibank Texas after the takeover was completed on March 31, 2005.

Citi reported losing $811 billion several days after Merrill Lynch announced that it too has been losing billions from the subprime mortgage crisis in the US. On April 11, 2007, the parent Citi announced the following staff cuts and relocations. On 4 November, 2007, Charles "Chuck" Prince quit as the chairman and chief executive of Citigroup, following crisis meetings with the board in New York in the wake of billions of dollars in losses related to subprime lending. Former United States Secretary of the Treasury Robert Rubin has been asked to replace ex-CEO Charles Prince to manage the losses Citi has amassed over the years of being over-exposed to subprime lending during the 20022007 surge in the real estate industry. In August 2008, after a three year investigation by California's Attorney General Citibank was ordered to repay the $14 million (close to $18 million including interest and penalties) that was removed from 53,000 customers accounts over an eleven year period from 1992-2003. The money was taken under a computerized "account sweeping program" where any positive balances from over-payments or double payments were removed without notice to the customers. On November 23, 2008, Citigroup was forced to seek federal financing to avoid a collapse, in a way similar to its colleagues Bear Stearns and AIG. The US government provided $25 billion and guarantees to risky assets to Citigroup in exchange for stock. This was the latest bailout in a string of bailouts that began with Bear Stearns and peaked with the collapse of the GSE's, Lehman, AIG and the start of TARP. On January 16, 2009 Citigroup announced that it was splitting into two companies. Citicorp will continue with the traditional banking business while Citi Holdings Inc. will own the more risky investments, some of which will be sold to strengthen the balance sheet of the core business; Citicorp. The idea behind splitting into two companies is so Citigroup can dump "the dead weight" on Citi Holdings, allowing the prime assets of Citicorp to operate away from that of the toxic assets.

FINANCIAL & INVESTMENT ENVIRONMENT OF CITI BANK PAKISTAN:

CITIBANK N.A. from the start of its launch in Pakistan brought revolutionary concept in Banking in Pakistan this is the first bank who introduced plastic money in Pakistan and the first bank who introduced the Auto Finance in Pakistan. With its innovatory thinking and brilliant new idea of banking to give the top most superior services its banking services are at its top and unmatchable. In Consumer Banking we introduced Auto Financing and Credit Cards. Home Loans and Personal Loans. With the new concept of Wealth management with JS investments we are launching our new Products the INVESTMENT PRIDE. CITIBANK N.A also launched Online Banking, Internet Banking and PC Banking in 1990, offering a full service, round-the-clock access to banking. Citibank is the leader in international capital market transactions for Pakistani issuers. Through the development of innovative financial products and the ability to successfully tap international capital markets, Citibank has raised long term financing in the form of Global Depository Receipts ("GDRs"), Euro-convertibles and Floating Rate Notes ("FRN") Citibank has been the leading player in the syndicated loans business. It has nurtured a diverse local investor base, demonstrated by its unmatched track record of raising financing in excess of PKR 20 billion for the local market. Citibank is also one of the leading players in the distribution business, which involves arranging syndicates for Initial Public Offerings ("IPOs"), rights issues and distribution of term finance certificates. As a result of its involvement in these transactions, Citibank has achieved a clear understanding of the various complex regulatory, legal and business issues, that form an integral part of the capital markets business. Securitisation offers a strategic funding alternative, since it allows for the conversion of assets, with strong cash flows, into a capital source. Citibank has pioneered both local and foreign currency securitisation transactions. It has completed local currency transactions worth PKR 2.5 MMM. Moreover, Citibank successfully arranged the first ever local currency future receivables securitisation in Pakistan Citigroup is the world leading group. It comprise of the 12 % of the total American Economy from the BENAMEX company to the CITIBANK and from the CITISTREET to the SMITH BARNEY there is a limit less structure of global chain of networking and excellent business skills.

In Pakistan Citigroup entered by the name of Citibank. The world leading bank steps in the economy of Pakistan with a lot of new banking skills and innovation to teach the true spirit of banking not only in Pakistan but in all over the world. CITIBANK enhances its working by an introduction of EMEA Concept that means the EUROPE, MIDDLE EAST, ASIA. This concept had been presented on and off by many financial persons in late 60s but now it is the true time to implement this concept and Citibank has a great responsibility to took this idea from the core keep its momentum high BANKING SECTOR OF PAKISTAN Pakistans Financial Sector has shown strong resilience to a challenging macroeconomic environment and global developments, says State Banks Financial Stability Review 2008-09, According to the Report, the size of the countrys financial sector, which includes Banks, Non-Bank Financial Institutions (NBFIs), Microfinance banks, Central Depository of National Savings (CDNS), the Insurance sector, and financial markets, in terms of assets, has increased to Rs 8.2 trillion by end-June 2009 from Rs. 7.1 trillion at end December 2007. The report summarizes the developments over 2008 and the first of half of 2009. The Report says that the stability of the financial system is largely derived from the predominant position of the banking sector, as other components of the financial system continue to grow at a more gradual pace. As opposed to the speculative tilt in conducting the business of banking in western economies, the underlying operating model of the banking sector in Pakistan fulfills the basic requirements of the function of financial intermediation: loans and advances are funded by a large and growing base of deposits, with virtually negligible reliance on borrowing, or the short term wholesale market for financing assets. The Report noted that the growth in deposits did slowdown to 9.4 percent in CY08 after growing successively at an average rate of 18.1 percent for the last 5 years, despite the increase of 17.2 percent (in USD terms) in home remittances; a reflection of both the slowdown in the economy, preference for hard currency due to the prevalent environment of uncertainty, and competition from the National Savings Schemes (NSS) offering a higher rate of return than bank deposits. These developments even overshadowed the potentially positive impact of introducing the minimum rate of return of 5.0 percent on all PLS savings deposits by the SBP, w.e.f. June CY08, it said and added a visible increase in the currency to deposit ratio and a slowdown in the money multiplier during H2-CY08 also highlights the challenging operating environment of the banking sector. Notwithstanding, deposits growth has picked up pace in H1-CY09, growing by 8.2 percent in H1-CY09 alone. But the impending transfer of government deposits from banks to a single treasury account maintained by the State Bank of Pakistan can potentially have a significant impact on those banks which have a large reliance on these deposits, it said.

ANALYSIS ON CITI BANK RATIO ANALYSIS 1. Return on Average Assets = (Net Operating Income/ Total Assets) 2009 (Rs 000) 118,849/101,651,827= 0.00116 2008 (Rs 000) 1,130,939/92,468,851= 0.012 Comments: Return on average assets measuring the profitability of a bank. The comparison of 2008 and 2009 shows the decline of 0.0108. 2. Return on Equity = ( Net Income/Stockholder Equity ) 2009 (Rs 000) 800,362/9,013,072= 0.088 2008 (Rs 000) 259,681/6,325,911= 0.041 Comments: ROE. A measure of how well a company used reinvested earnings to generate additional earnings so the comparison of citi bank ROE shows an increased.

3. Rate Paid on Funds = Total Interest Expense / Total Earning Assets 2009 (Rs 000) 118,849/13,432,726= 0.00884 2008 (Rs 000) 1,130,939/7,051,616=0.16 Comments: This indicates what percentage or rate of interest is paid from assets.

4. Net Interest Margin = Net Interest income/ Earning Assets 2009 (Rs 000) 5,287,000/13,432,726= 0.393 2008 (Rs 000) 5,960,700/7,051,616=0.84 Comments: This shows how successful a firm's investment decisions are compared to its debt situations. Citi bank comparison show a decline which means bank did not take optimal decision.

5. Long Term Debt to Total Liabilities and Equity = ( Long Term Debt / Total Liabilities plus Equity ) 2009 (Rs 000) 65,484,768/101,651,827=0.644 2008 (Rs 000) 68,627,815/92,468,851=0.74 Comments: It indicates what proportion of equity and debt the company is using to finance its assets. The comparison show a decline.

6. Equity to Assets = ( Stockholders Equity / Average Total Assets ) 2009 (Rs 000) 9,013,072/ 101,651,827=0.088 2008 (Rs 000) 6,325,911/92,468,851=0.0684 Comments: The comparison show a increased in equity to asset ratio of a bank.

FREE CASH FLOW Net Income + Amortization / Depreciation -Changes in working capital - Capital Expenditure = FREE CASH FLOW 2009 800,362+4 27,212+1 6,610-(11,859,226)- 9,254,001= 3,849,409 2008 259,681+3 44,828+8 ,187-(7,780,132)- 3,768,274= 4,624,554 Comments: Free cash flow is the amount of cash that a company has left over after it has paid all of its expenses, including investments. The decline in the FCF shows that the bank had made investment.

RECOMMENDATION

Enhanced focus on cooperate governance. Restructuring/ Privatization of Banks. Enhancing the Outreach of banking Services through Branchless banking. Issuance of Global depositary receipts. The bank should reduce the minimum amount of opening a bank account.

The bank should open its more branches. Bank should expand its network of ATM, it should have ATMs at cinema halls, shopping complexes, office complexes, etc. The bank should also provide services on Sundays. Bank should stress on telemarketing and on direct sales as well