Citi CEO: The growth opportunities in Israel are huge

Vikram Pandit: We intend to expand retail banking activity, but we have no plans to buy an Israeli bank.

6 December 10 17:07, Omer Rabin

Citigroup Inc. (NYSE: C) CEO Vikram Pandit is in Israel. He has met economic leaders, and Prime Minister Benjamin Netanyahu, who made time for him from his schedule, which is currently crowded because of the need to deal with aid for victims of the Carmel fire.

This is Pandit's first visit to Israel, and was made to mark Citigroup's tenth anniversary of activity in the country. The visit is considered mostly representative, given Citigroup's aim to expand its Israeli operations and strengthen the position of its local branch in the country's corporate banking sector.

"I had the privilege of meeting the finance minister, the prime minister, and President Peres, and I took the opportunity to congratulate everyone on the amazing way in which the Israeli economy has coped in recent years, especially with the last crisis," Pandit said at a press conference at Citigroup's office in Tel Aviv.

"When you look at Israel's 4% growth, 4% deficit, and 6% unemployment, there are few such economies in the world today, and it is truly thanks not only to crisis management, but also to the relationship between the parties. Above all, it is something that touches on the clean way in which everyone works together to create a global competitive advantage and create an economy that is productive, original, and entrepreneurial. It is pleasant to be in such a place in the world where there is such a feeling, a feeling that is not common the contemporary economic world."

Citigroup has 130 employees in Israel. It has a trading room that is responsible for 10-15% of the transactions in securities, and it has 400-500 large business customers.

Pandit said, "We feel that Israel has huge growth opportunities, and we are here to be a part of this, and to support it in Israel. That means ensuring that our business can meet the pace of growth. A few months ago, we opened the international banking division, which handles private banking outside Israel."

Pandit disclosed some features of Citigroup's expansion plans in Israel. "We're examining the possibility of entering into products related to payments via mobile telephones in Israel. We want to be in a position in which the Israeli audience which roams the world - and there are six million Israeli passengers who travel abroad - knows two things wherever it goes: where the embassy is, and where the Citigroup branch is."

Pandit also hinted about Citigroup's plans for retail banking operations in Israel, saying, "We know that the era in which American consumers drove the economy has come to an end, and growth will come from emerging markets. Therefore, the big contemporary economic trends that we want to seize are emerging markets and global services, and these are our two main focuses of activity from now on."

Pandit dismissed the possibility that Citigroup might acquire an Israeli bank at this time. "Our main objectives in Israel are to grow with the economy, and to continue our activity in the country organically. Our strategy is organic."

Asked by "Globes" about the Israeli real estate market, Pandit said, "Every measure to expand available land is very important to people. There's an impression that the rise in prices can be dealt with. I think that this market in Israel is really fascinating at this time. We're part of this though our private banking activity, and we have no intention of creating specialized activity in this matter beyond our regular services."

Pandit also visited the offices of electric car venture Better Place, but refused to say whether he intended to invest in the company in the future. On the other hand, he expressed great enthusiasm at the oil and gas drillings taking place in Israel, and it would appear that he was not put off by the interim conclusions of the Sheshinski committee, whose main recommendation is to raise the state's share of oil and gas discoveries from one third to two thirds.

"The oil and gas drillings in Israel are a great story, because they offer the possibility that Israel will generate exactly the right kind of growth, and enable Israel to be an even bigger exporter," Pandit said. He expressed the hope that the money from taxation of oil and gas production would go towards education and building infrastructures that would enable Israel to grow "in important directions" as he put it.

He said that Citi too hoped to finance some of the investment in oil and gas. "We want to be part of the growth in Israel. There's nothing we would like better than to be part of fascinating projects of this kind," he said.

Published by Globes [online], Israel business news - www.globes-online.com - on December 6, 2010

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