$25 billion? Citi says GTS revenue could double

By Maria Aspan

NEW YORK (Reuters) – Citigroup Inc’s (C.N: Quote, Profile, Research) global transaction processing business, which alone makes some $10 billion in annual revenue, could more than double that take within a few years, the unit’s head told Reuters.

The bank says its global transaction services unit, or GTS, currently has about a 4 percent share of a roughly $250 billion-revenue global market.

But if it benefits from the banking industry’s continuing consolidation, Citigroup could soon make $25 billion in annual GTS revenues, Francesco Vanni d’Archirafi, the unit’s chief executive officer, said in an interview on Tuesday.

“It would not surprise me if a few years down the road we have an 8 percent market share,” he said, adding, “Going from 4 percent to even 10 percent market share, it’s very feasible, and that means that our business becomes a $25 billion business.”

The GTS unit is known inside and outside Citigroup as the bank’s “juggernaut” and its “most underappreciated business.” It processes more than $3 trillion in payments and securities every day for corporations, government agencies and other financial institutions.

The bank, which is recovering from the financial crisis after taking $45 billion in U.S. government bailouts, counts several U.S. agencies as customers, including the Treasury Department and the State Department. In December, the Treasury sold the last of its Citigroup common shares, unwinding most of the government’s investment in the bank.

Citigroup spends about $1 billion annually on building and maintaining technology for GTS. Vanni d’Archirafi said that regular investment will help the bank weather the regulatory and capital pressures forcing others in the industry to consolidate.

“If we continue to invest in human capital and technology and our network, I don’t see any reason why we should not be one of the consolidators,” he said.

(Reporting by Maria Aspan; Editing by Tim Dobbyn)

$25 billion? Citi says GTS revenue could double