Governance Problems in Citigroup Japan

In 1865, the company joined the US national banking system and became The National City Bank of New York. By the 1890s, City Bank became the largest bank in the US and one of the major American banks to establish a foreign department. Branches were started in Asia, Europe and Latin America by the early 1900s. In 1955, City Bank's name was changed to the First National City Bank of New York, and later shortened to the First National Citibank (FNC). In 1968, First National City Corporation, a bank holding company, became the parent of FNC. In 1974, the holding company changed its name to Citicorp in tune with its global business. In 1976, the First National City Bank became Citibank NA (National Association).

The latter merged with Smith Barney; Banamex, a merged entity of Banco Nacional Mexicano and Banco Mercantil Mexicano and Primerica Financial Solutions, a personal insurance and asset management company. All these entities merged to form Citigroup in 1998. Citigroup was the first financial services company in the US to bring together banking, insurance and investments under one umbrella. By the early 2000s, it had emerged as the largest financial services conglomerate in the world with nearly 275,000 employees and 200 million customer accounts in over 100 countries. Citibank NA was the largest bank in the world in terms of market capitalization (Refer Exhibit II for the financials of Citigroup). Citigroup entered Japan in 1902 by opening its first branch at Yokohama...