Citigroup CEO on the risks facing the banking industry

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So we're here today at the fourth European Financial Forum in Dublin. We're delighted to have Mike Corbat, CEO of Citigroup, here with us. One of the big things we're talking about a decade on from the financial crisis-- and the big picture for the conference, really-- is, a decade on, are we safer? Are we better? Have the problems been fixed, or are there still risks? So maybe you could give us your brief impressions of that.

Well, I think we're definitely safer and better. You know, when you think about-- and come back it's your question in two ways. One, when you think of capital, liquidity, risk, risk metrics, concentration risk, all of those things, I think, have been meaningfully dealt with.

And I think the second important piece is more from the strategic side, that business models have evolved. 10 years ago, everyone was out with the financial supermarket trying to be everything to everyone. Today you look at strategies, and strategies are much more bespoke on an individual company basis, which means we don't have that concentration risk amongst the things that people are doing. And I think that makes the system much safer.

So it's much safer, but there are some new risks, and some that we could never have envisaged 10 years ago. Who would've thought we would be talking about Brexit? And we are 45 days out. Or we're less than 45 today. There's a lot of uncertainty out there. How do you deal with that?

Well, again, we've-- and when we say we, I'm going to speak not just to Citi, but the industry. We've had to prepare for the worst, right? You hope for the best, and you plan for the worst. And I think everybody, certainly in our case, we've had to plan for the worst. And that is the so-called hard exit, that there is no pathway to any smooth transition. And we've got to be prepared on day one to be there to support our clients.

And so we've made that investment of time, effort, energy, resources, business structure, to make sure we're there. And I think as you look at some of these things going on, it's forced us as a company and, I think, forced the industry to some of the extremes to be preparing around sanctions, to be preparing around trade fallout, of different negotiations going on in the world. And, as you've described, it's now become a reality.

Yeah, because when you think about the Europe continent going forward, how does this affect your appetite to invest in Europe?

Well, one is we've been in Europe a long time. As an example, we're in Ireland today. We've been here 54 years. So these aren't places that we've come to overnight. And, again, we're supporting not just the local champions or the national champions. We're supporting the global champions that operate there.

And we can make different arguments around trade and Balkanization, but trade is not going away. Trade routes may realign, but our customers and clients count on us to be there to make sure that they can be in business.

And we think about-- I mean, your home market isn't exactly a risk-free market, either, when you think about uncertainty around things like the shutdown, which may or may not resume at some point. You have all the stuff around trade. How big are the risks for you in the US?

Well, I think the US is fortunate today because we have the backbone of a fairly strong economy. If you look at in 2018, right at 3% growth. And you look around the world from a developed markets perspective, it's kind of at or near the top of its league. People are predicting, and we are seeing, little bits of signs of slowdown. But we don't see in the US any type of precipitous fall-off or any near- to intermediate-term threat of recession.

And so we still view there to be very good opportunity. And I think our clients remain excited. Not just our US clients, but our global clients remain excited about being in the US.

Because Citi is one of the biggest banks in the US, and one of the most global banks as well, coming from a bank your size, where are there opportunities to do more than you already do? Or are you effectively topped out?

No, we're not topped out. We think we've got a fair bit of runway. And what we've talked about, and what we've laid out to our investors, is a path around organic growth. And that growth, when you look at businesses like our treasury and trade solutions business, social security services business, our private bank, our lending. If you look at what we've done in equities, or if you look at what we've done in M&A, we continue to have good runway in those businesses, and pretty high growth rates.

So you still don't want to buy Deutsche Bank?

No. Again, we've talked about-- we're really comfortable with our organic strategy.

Mike Corbat of Citigroup. Thank you very much.