Citibank to expand in Nevada

Chris Jones

Wednesday, May 22, 2002 | 11:10 a.m.

Tuesday's merger deal between the parent companies of Citibank and California Federal Bank may alter the Nevada banking market, where both companies already enjoy a significant market share.

If approved, the $5.8 billion deal between New York-based Citigroup and San Francisco-based Golden State Bancorp, parent of Cal Fed, would make Citibank the third largest bank in Nevada.

In addition, the acquisition of 17 branches now operated by Cal Fed would allow Citibank to improve its market presence in the Las Vegas Valley while expanding into several communities in Northern Nevada.

With Nevada deposits of $1.41 billion and $1 billion respectively, Citibank and Cal Fed were the fifth and sixth largest banks in Nevada last year, according to the most recent June 30 state market share report issued by the Federal Deposit Insurance Corp.

While updated numbers won't be available until later this year, the addition of Cal Fed's Nevada deposits should push Citibank's in-state market share past those of Nevada State Bank and U.S. Bank, which reported deposits of $2 billion and $1.45 billion last summer.

With deposits of $5.4 billion, Wells Fargo was Nevada's largest bank last year; Bank of America ranked second with Nevada deposits of $4.9 billion.

Citibank's banking division employs about 60 people in Southern Nevada. Area Manager Gayla Bandelin said she "is excited" about the proposed deal but referred other questions to the company's headquarters in New York.

A corporate spokesman for Citigroup could not be reached for comment.

Janis Tarter, spokeswoman for Cal Fed, said the merger is unlikely to prompt large-scale job cuts for her bank's 174 Nevada employees.

"Citibank said the two campanies fit well together and because there's not a lot of overlap, they don't expect the need for much consolidation," Tarter said.

Regardless of what changes occur on the balance sheets, Laura Schulte, president and chief executive officer of Wells Fargo Bank-Nevada, said she doesn't believe the Citibank-Cal Fed merger will alter the daily business practices of banks or consumers in the state.

"From a consumer standpoint, competition is always good but our bank and others are already competing with (Citibank and Cal Fed) in this market," Schulte said. "It's not like there's a new player coming in that we have to contend with."

Rich Robinson, president and CEO of Bank of Commerce, also believes the proposed deal will have little effect on small banks and their customers.

"We rarely run into Citibank in terms of competition for loans, so I don't think this will create any real changes in the competitive balance of this market," Robinson said.

Schulte said she could not address speculation that Wells Fargo might attempt to outbid Citigroup for Golden State Bancorp, although she said such a move would likely require Wells Fargo to divest itself of Nevada assets in order to remain below federal restrictions that limit a bank's market share in individual states to about 30 percent.

Wells Fargo controls about 25 percent of the Nevada market, according to the FDIC.

archive