Citigroup CEO Michael Corbat has a good thing going.
Corbat pocketed $24 million last year and $24 million the year before. This year, Citibank, the world’s largest credit card issuer, has an even better thing going. Citi is paying just 0.35 percent interest on corona-crisis loans from the Federal Reserve and charging customers as much as 27.4 percent in credit-card interest. That spread is generating oodles of dollars that Corbat would like to pass on to Citi shareholders like himself. But the Federal Reserve wants Citi and other big banks to sit on their cash as a guard against a financial system crash, and last month announced mild limits on the dividends banks can shell out.
Corbat remains unimpressed by Fed worries about financial fragility. Notes the Citi CEO: “From our perspective, our dividend is sound, and we plan on continuing to pay it.” Corbat’s solicitude for the well-being of his shareholders doesn’t seem to extend to his customers. This past spring, Citi accounted for four times more credit-card complaints to federal regulators than any other major bank. (inequality.org, June 2020).
My comment: What do you expect? The priority is making money, with attendant privileges. Customers are a background irritant, to be impatiently attended to between being wined and dined by politicians and lounging on the yacht.