Corporate strategy for Citibank N.A.-- credit card business center

• Main Author: Samia, Aileen B.
• Format: text
• Language: English
• Published: Animo Repository 2000
• Subjects: Credit cards > Philippines; Consumer credit > Philippines; Citibank NA Philippines
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/3958
• Institution: De La Salle University

The credit card business is one of the major focuses of Citicorp, the holding company of Citibank N.A. Philippines. The card business reached a milestone of 500,000 cards in the market last year. This phenomenal growth is attributed to the card industry's expansion and the company's continuous commitment in giving their customers excellent service in their financial needs. In the onset of domestic as well as international economic contraction, the card business is faced with challenging times as market share is slightly falling and is threatened by increasing competition. The Credit Card industry is made up of 17 companies that are doing their best to take advantage of a relatively untapped market. Only 30% of potential cardholders have credit cards. This is because Filipino's are relatively a cash based society. Add in the emergence of technological improvements like Smart Cards and Debit Cards, credit card companies are trying to out do each other by offering perks that ranges from free membership to giving out items like cell phones to making their own cards powerful and attractive. The cards ceased to be just giving out credit line. The importance of the industry is strengthened by the enactment of laws governing credit card fraud as well as establishment of better control by the industry overseer, the Credit Card Association of the Philippines. Even international card groups have seen the Philippines and Asia as a region of growth. The current leader in this industry is Equitable Bank Network followed by Citibank who was in the number one position in 1997. The present economic condition is not that fertile for any industry including credit cards. The economy is projected to fully recover only after the Millennium but the good news is that the Philippines is expected to do better than its Asian neighbors. Any recovery would still be viewed not with complete optimism but with more caution. However, it has been noted that usage of credit cards has been increasing in these times of weak cash flow for consumers. Though this is good news for the industry, the problem of defaults will hamper each credit card company to expand with pretense or relish. In facing these challenges, Citibank Card Products Business should adapt intensive product development strategies to regain it market share and strengthen its position as an ideal card for customers. Citibank is the number one card issuer in the world and that position should be the goal for the Card Business in the country as well. Product development will lead into more cards being issued to more defined target customers at the same time contribute to the company's financial growth. This strategy is also consistent with Citicorp's global strategy to bring financial needs that are shaped by the lifestyles of their customers. However, Citibank Credit Card Business Center has no financial statement of its own. The only financial statement available is the consolidated statement with the whole bank's financial statement including the Global Finance and Private Banking. Moreover, the credit card income and loss was not also included in the statement of account secured. The bank deemed its financial documents as strictly confidential. Thus in this paper, a financial projection for the Credit Card Business Center alone had been made based on assumptions. For reference, the consolidated financial statement of Citibank N. A. as a whole has been included in the Annexes.