Citigroup realizes they’ve been over-charging Gold clients

Got $50,000? If you have it in a Citigroup (NYSE:C) Citigold account as of Nov. 1, you won’t have to pay monthly fees anymore. Yipee.

Got $50,000? If you have it in a Citigroup (NYSE:C) Citigold account as of Nov. 1, you won’t have to pay monthly fees anymore. Yipee. Smaller banks would be falling all over themselves to land clients who keep $50K in their bank accounts, but Citigroup thought it would be a great idea to charge high-net worth individuals to get an exclusive banking account that promises “invitation-only movie premieres, closed door pre-sales events, members-only clubs, and many of the top-tier restaurants in every time zone.”

It’s not a good sign for one of the top five biggest banks in the US. It’s an admission, in fact, that Citigroup needs to do something to stop the blood-letting. They’ve slipped to fourth place in bank deposits among the country’s biggest banks after they lost out on their bid for Wachovia Corp. Wells Fargo & Company (NYSE:WFC) landed Wachovia instead, and they quickly jumped up on the list of big banks.

Still, will cutting the fees for big fish be enough to lure back customers? A lot of analysts say probably not. If Citigroup’s plans in China come to fruition, though, it probably won’t matter. Who needs American clients when you can get Chinese?

Citigroup pulls shank on HSBC

Citigroup (NYSE:C) has raised the stakes in China where they’re taking on HSBC (NYSE:HBC) and Standard Chartered (LON:STAN) for supremacy.

Battle lines are being drawn between two of the biggest banks in the world: Citigroup, Inc. (NYSE:C) and HSBC Holdings, PLC (NYSE:HBC). It’s an American bank vs. a European one, and the fight’s over an Asian country: China.

China opened up to foreign banks in 2006, and ever since that time, just about every banking giant in the world has been struggling to get a foothold there.

“We have aggressive consumer banking expansion plans and want to open branches as fast as regulators in China will let us,” Citigroup’s co-chief in Asia, Stephen Bird, told Bloomburg.

Citigroup has just 29 outlets in China. That puts it in third place behind HSBC (102) and UK bank Standard Chartered (LON:STAN), which has 59. Citigroup’s just announced they’re putting more chips in the pot, though, with aggressive plans to hire 12,000 more people in the country over the next three year.

What does it mean for investors? Better performance. In 2008, Citigroup posted a 46 percent revenue increase. 2009 stats aren’t available, but in general banks have clocked more than 20 percent returns on equity in China. That’s far better than their returns in developed markets like the U.S., and it just might prove to be the savior for a fallen giant.

Top five biggest bank stocks in the U.S. by market cap

The roiling financial markets in the U.S. have knighted new winners and demoted the old guard. What are the top five biggest banks in America?

The roiling financial markets in the U.S. have knighted new winners and demoted the old guard. What are the top five biggest banks in America?

Bank of America Corporation (NYSE:BAC) $132 billion
JPMorgan Chase & Co. (NYSE:JPM) $149 billion
Wells Fargo & Company (NYSE:WFC) $129 billion
Citigroup Inc. (NYSE:C) $111 billion
Goldman Sachs Group, Inc. (NYSE:GS) $72 billion

Earning future looks dim for Goldman (GS) and Morgan Stanley (MS)

If the earnings results from commercial banks are any indication, the investment banking sector could get hammered this week with reports from Goldman and Morgan Stanley.

After some unimpressive earnings from the commercial banking giants, things don’t look great for the upcoming earnings releases from investment banks Goldman Sachs Group, Inc. (NYSE:GS) and Morgan Stanley (NYSE:MS).

On the commercial side, revenues were down at all three of the biggest banks:

  • Bank of America Corporation (NYSE:BAC): Revenue -40 percent
  • Citigroup Inc. (Public, NYSE:C): Revenue -26 percent
  • JPMorgan Chase & Co. (NYSE:JPM): Revenue -24 percent

The good news? The three commercial banks generally beat analysts estimates, but they did it on lower credit losses as consumers hunker down to pay off their debts (another factor that could slow the economy at large).

If the commercial banks are any indication, earnings from the biggest investment banks will be unimpressive, too. Be wary of a sell-off in shares of Goldman and Morgan Stanley. Goldman is slated to report their earnings on Tuesday, July 20, before the market open. Analysts are calling for earnings of $2.04 per share, down $2.89 from a year ago. Morgan Stanley will report earnings Wednesday, July 21, before the market open. Analysts are anticipating earnings of $0.46 per share, up $1.83 from a year ago’s loss of $1.37 per share.